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Spain’s true crisis isn’t economic, it’s institutional

The ongoing economic slump has helped erode the credibility of Spain’s banks, politicians, judiciary and royalty. The much-vaunted Transition to democracy needs to be updated.

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ToroOsbourne 300x300 Spain’s true crisis isn’t economic, it’s institutionalAs Spain has moved closer to what looks increasingly like economic disaster, there have been a couple of surprising – even heartening – moves by the country’s senior politicians lately.

One was the announcement made by Socialist leader Alfredo Pérez Rubalcaba that his party offered its full support to the conservative government going into the key European summit in Brussels on June 28. This rare instance of political unity was accompanied by an unusual show of stark public honesty by Prime Minister Mariano Rajoy. “We can’t finance ourselves at these levels of interest much longer,” said the man who had denied that Spain would request a bank bailout days before it did so, and who said he would not raise taxes, just days before doing so.

Perhaps these developments herald a new era in Spanish politics, of unity, statesmanship and treating voters like grown-ups. But more likely, they are simply glitches for a political class that has seen its credibility sandblasted by the economic crisis.

The reputation of Spain’s politicians has been on a steady slide since around 2008, due to a seemingly never-ending flow of corruption cases and a failure to tackle the economic crisis effectively. A recent opinion poll by Metroscopia found that 79 percent of Spaniards believe their political representatives are failing to rise to the challenge of the current crisis.

But the politicians can rest assured that they are not alone in their pariah status. In the last six months or so, Spain’s financial sector, its judiciary and its royal family have all seen their stock fall as dramatically as the Ibex 35. The same Metroscopia study found that 62 percent of those asked felt the country’s “main institutions” are not doing their job effectively enough. With the Catholic Church often cutting a divisive figure, Spain’s football team is perhaps the only major institution we can now depend on.

The authors of the cited polls, José Juan Toharia and José Pablo Ferrándiz, elaborate: “Our society has become orphaned of political, economic and social leadership, right in the middle of the worst crisis in living memory.”

In recent days, the judiciary has been Spain’s most glaring institutional casualty. A drawn-out and embarrassing furore over the extravagant use of public funds for apparently private means saw Supreme Court president Carlos Dívar step down from his post. The byzantine intrigue behind the departure of Dívar, who also resigned as head of the judicial oversight body, only added to the perception that Spain’s justice system is burdened by political allegiances and petty vendettas. It’s a notion that was given an international airing when investigating judge Baltasar Garzón was suspended for attempting to investigate the crimes of the Franco dictatorship, something no other magistrate had ever done. That case in part must explain why over two thirds of Spaniards believe their justice system works “badly or very badly”.

A word from the king

Not so long ago, an excess of self-interest and tribalism by the country’s politicians and misconduct by the judiciary might have seen King Juan Carlos step in with a timely comment aimed at putting the offenders in their place. It may not have solved the problem, but it might at least have made the offending individuals blush a bit.

But since the scandal of his lavish elephant-hunting trip to Botswana in April, just as the economy was teetering on the brink, the king’s own judgement has been cast in doubt. To make matters worse, the corruption scandal involving Juan Carlos’s son-in-law Iñaki Urdangarin has tarnished the royal family with the same dirty brush associated with the main political parties.

King Juan Carlos has been the most visible figure of the Spanish Transition, which has been lauded over the years as a triumph of political will and statesmanship that brought a curtain down on the dark years of Francoism. And yet, the newly hatched doubts that hang over the monarch reflect how flimsy and inadequate the Spanish institutions that emerged from the Transition now appear.

In a speech titled ‘The need for a second Transition’ given to students of Law in the University of Barcelona in May, the academic Vicenç Navarro blames Spain’s recent glut of corruption and judicial mishaps on the failings of the original Transition, which he says took place “on very favourable terms for the conservative forces that controlled the state.” Maintaining the monarchy, he adds, was one such instance of this.

Still outraged

But blaming the right alone would exclude many politicians and magistrates who also let down ordinary Spaniards. In fact, when the 15M, or indignados, movement first rose up last year, one of its main aims was to break the Partido Popular-Socialist grip on the country’s political and legal institutions.

A year after that outpouring of outrage, there’s plenty more to be outraged at, not least the wreckage of the banking sector. Four years ago, the government said Spain had “perhaps the most solid financial system in the world”  – but recently we have had to watch a bank declare €300 million in profits one month, and then €3 billion in losses the next, after a generation of bankers had overseen an orgy of mismanagement, often ensuring themselves huge payoffs in the meantime.

One of the most noteworthy elements of this institutional crisis is how the supervisory bodies themselves have been dragged down. The Bank of Spain’s role in the financial crisis is apparently undeniable and the infamous Dívar, remember, was the head of the country’s judicial oversight body. The accountability of Spain’s politicians, meanwhile, often seems to be in freefall. This is a phenomenon we shall see at its zenith over the summer, when many party figures tend to emerge at their leisure from their holiday homes to issue partisan statements or recorded messages, avoid any questions and head back to the pool.

Some of the bruised reputations of these politicians, judges, courts, monarchs and bankers will need a long time to recover from the battering they have deservedly received – while others are probably damaged beyond repair. But when Spain finally gets its economy back on its feet it will have to stop looking back with satisfaction at its last Transition and start looking ahead to a new one.




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3 Comments for “Spain’s true crisis isn’t economic, it’s institutional”

  1. An excellent summary of the state of play in Spain as shocking as it is I’m so pleased its all coming out and fundamental questions being asked. There seems to be a malaise in public objection to such horrific institutionalised corruption and incompetence…may its a period of disbelief or shame? What’s clear is economics and even politics are easier to change that culture which is tacit and deeply embedded in a (from an outsider’s glance) Spanish way of life. I hope future generations can look back at these days as a turning point for the future Spain of transparency, efficiency and integrity in society and a positive contributor to a new Europe. Its a dream that can only become reality through driven change from top down bottom up and outside in…bring it on!

  2. Spain has been run on every level like a mafia family: my law is determinded by what is good for my family. Social, political and ethnic groups of all colours, kinds and sizes compete and there’s just a thin veneer of Staatsgeist that holds all this together.

    No real need for a change was felt while money was in supply. Now the fight over the carcass of what should have been a country, a state, a common project will see regroupments and realignments, some frighteningly old, some deceivingly young, aiming at even more of the same, but with an incomparably bigger damage already sharpening its talons.

  3. An excellent article but I would mention that Garzon also had ‘his wrist slapped’ for bugging defense lawyers conversations with their clients.

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