The eternal economic malaise affecting many countries in the eurozone is sparking the resurgence of the long-dormant forces of European nationalism. In the perversest of ironies, the closer the old continent gets to fulfilling the euro- and techn-ocrats’ vaunted dream of political union, the more divided and unruly its constituent parts seem to become.
Against such a backdrop, it’s hardly surprising that T
he Daily Telegraph‘s recent editorial piece highlighting Spain’s economic fragility — or otherwise put, state of bankruptcy — so inflamed passions here in Spain.
The title of the article, penned by the paper’s assistant editor Jeremy Warner, was about as blunt, undiplomatic and tabloidesque as they come:
“Spain is Officially Insolvent, Get Your Money Out While You Still Can.”
Drawing on the IMF’s latest forecasts for the Spanish economy, Warner wrote:
“By 2018, Spain has far and away the worst structural deficit of any advanced economy, including other such well-known fiscal basket cases as the UK and the US.
“So what happens when you carry on borrowing at that sort of rate, year in, year out? Your overall indebtedness rockets, of course, and that’s what’s going to happen to Spain, where general government gross debt is forecast to rise from 84.1 per cent of GDP last year to 110.6 per cent in 2018. No other advanced economy has such a dramatically worsening outlook.”
Warner concluded that, faced with such a bleak outlook, Spain, like Portugal, Ireland and Greece before it, will eventually need to undergo a restructuring of its debt — a pill that could well prove too big for Northern European creditor nations to swallow.
Whether Warner’s prognosis is correct or not, only time will tell (and one can’t help thinking he should look around a little more at his own glasshouse surroundings before next time throwing stones — after all, the UK is estimated to have the largest debt in the world!). But one thing that is certain is that in a world whose financial system is now precariously kept aloft by two slowly buckling pillars — that is, ever larger doses of central bank liquidity and the gradually diminishing public faith and trust in the system — the Telegraph‘s article is the closest any newspaper has come to declaring all-out financial war against another country.
What’s more, the article could not have come at a worse time for Rajoy’s bedraggled government, arriving as it did just a few days before a crunch meeting of the eurozone’s finance ministers intended to kickstart the creation of a European banking union — a union that Spain desperately needs to shore up its banking institutions.
Along with France, Italy and a number of other struggling eurozone economies, Spain mustered all its political wiles on Tuesday to pressurize Germany into accelerating the foundation process — but to no avail. Germany (quite understandably) is reluctant to rush the procedures, preferring instead to carefully lay the foundations of the banking union before the ribbon is cut and the politicians and bankers break out the vintage Bollingers.
Besides the riguors of European diplomacy, Rajoy faces the prospect of a resurgence in Spain’s protest movement following the second anniversary of Spain’s 15th May movement this Wednesday, not to mention a gathering leadership challenge from hardline elements within his own party.
With public support for the Popular Party (PP) now plumbing unfathomable depths, discontent and fear of the prospect of electoral humiliation has lead many among the party’s fanatical fringe to gather around two sharply divisive political heavyweights: Esperanza Aguirre, the former leader of the Madrid Community and a regular Bilderberg attendee; and former Spanish PM José María Aznar, the rather rodent-like politician who, in case you don’t remember, proudly basked in his 15 minutes of international fame standing shoulder-to-shoulder with Señores Bush and Blair as they declared war against Iraq in 2003.
PP’s Pitbull Bites Back
Unsurprisingly, it didn’t take long for Spain to respond to The Telegraph‘s “attack”. The first to hit back was the Popular Party’s faithful pit bull: the stridently right-wing newspaper ABC, which accused The Telegraph of intentionally sowing fear and uncertainty among depositors in Spain. Ironically, both The Telegraph and ABC, together with Le Figaro and Die Welt, are partners in the European Dailies Alliance (EDA).
But perhaps not for much longer, it seems — especially given the venomous tone of ABC’s riposte, in which it denounced Britain’s biggest selling broadsheet for:
a) Ridiculing the European integration process (a charge that neither the owners, editors nor the readers would likely deny);
b) Intentionally seeking to further destabilise the economies most affected by the European recession (a somewhat more serious accusation);
c) Defending the City of London’s financial interests (probably some truth in this – after all, a European banking union headquartered in Frankfurt threatens to rob the City of its raison d’être as Europe’s financial hub);
d) Launching this pre-fabricated news story so as to divert attention away from the growing problems facing the British PM David Cameron as he tries to keep the rabidly euroskeptic wing of his party in line (of the four charges this one probably hurt the most, suggesting as it did the most cynical of motives on the DT‘s part).
Perhaps the most entertaining aspect of the whole affair — at least for a neutral (which, as a long-time British expat resident of Spain, I like to consider myself) — was the winding trail of insults and invective left behind on the comment boards. Livid Spanish readers accused the Brits of being Machiavellian, money-grubbing, piratical meddlers (probably all fair points, given our history), while the Brits flung charges of corruption and Quixotean delusion at the Spaniards.
It was all rather reminiscent of a group of pre-adolescent schoolboys sizing up their appendages. Hundreds of commentors piled in to passionately defend the financial soundness of their respective national economy while demeaning the other. In fact, it was almost like the good old days of Europe, when bloody-minded nationalism and discord were the norm. A few posters even delivered, for old time’s sake, a few well-aimed asides at “ze Germans” (this is, after all, the DT we’re talking about).
After reading a hundred or so comments from uber nationalists of both stripes, I was feeling rather nauseous. But before packing it all in and doing something healthier (like chainsmoke on my balcony), a comment suddenly caught my eye. Posted by a lady called (or at least presumably called) Debbie Kendall, it was one of the few comments to transcend the schoolboy name-calling. Debbie’s was a much-needed voice of sanity amidst the raucous rantings of the prepubescent nationalists:
“The UK, USA, Greece, France, Italy: you’re all bankrupt. Why pick on poor old Spain and say they’re in denial, when just about every country’s bankrupt. You’re all in denial. Stop bashing each other.”
Amen to that!