A vast theme park south of Valencia is called Terra Mitica,or mythical land. That is not a bad term these days for Spain, a countryrubbing its eyes in post-bubble bewilderment at the alarming cracks in thenational edifice. Terra Mitica, in and out of bankruptcy since its opening in2000, is one product of the Valencia region’s giddy building boom fed by cheapmoney, venal politics and galloping illusion.
In Spain, the euro zone’s fourth-largest economy, the goodtimes are those of “vacas gordas,” or fat cows, and the lean years those of“vacas flacas,” or thin cows. Hispanic cattle, no longer fed on funny money,are super-skinny in this season of bust and brooding.
Valencia, like most of Spain’s 17 autonomous communities, isheavily in debt. It needs money from Madrid. The central government, headed bythe hesitant Mariano Rajoy of the center-right People’s Party, in turn needsmoney from the European Union “ and perhaps an international bailout. As forSpaniards, they just need money from wherever: 15,000 of them lined up theother day outside offices of John Deere, the U.S. agricultural machinerymanufacturer, after 150 jobs were advertised.
One way to look at Spain is as Europe in miniature:Threatened by crack-up, constitutionally flawed, uncertain of the relationshipbetween central and regional powers, awakening to structural flaws under thepressure of economic crisis and high unemployment. Separatist Catalan nationalismis nothing new; what is new is the spur given it by sharp financial pressuresthat provoke resentment “ especially when the right, with its centralizinginstincts, is in power.
Catalonia is, with Valencia, Spain’s most indebted region.In Spain, even a couple of generations on from the death of that ruthlesscentralizer Francisco Franco, it never takes much to stir historical wounds. Itwas precisely to assuage such wounds “ to triangulate old problems “ that theEuropean Union was created. Spain’s membership, long embraced with enthusiasmbut now sometimes questioned, remains an important source of stability. Crisismay also be a form of growing pain, for Spain as for Europe.
The old Spanish model went something like this: Cheap moneypoured into the country from Brussels and European banks; a building boom fedby foreign demand from sun-starved North Europeans and a welter of dubiousmortgages turned the coast into a construction site; regional politicians, incozy relationships with the local savings banks known as “cajas,” could notfind an airport or high-speed train or luxury condominium they didn’t want tobuild, however superfluous; layers of administration, from local to central,multiplied waste and obfuscated fraud; long after danger signs started flashingin Madrid the government opted, on the Citicorp model, to dance until the musicstopped.
In Valencia, as elsewhere, the lack of professional bankerstook a toll. Banco de Valencia went under, was rescued by the centralgovernment, and is now being sold off. Caja de Ahorros del Mediterraneo,collapsed after it was found to be more than $10 billion in the red, but notbefore its executives helped themselves to millions. Another savings bank,Bancaja, was forced to merge.
Valencia was bad, other regions scarcely better. IfCastellon has its ghost airport, so, at cost of over $1 billion, does CiudadReal in the center of the country, another runway picnic spot. Close to 25percent of Spaniards are now officially unemployed and over half of youngpeople: The numbers are exaggerated “ many work in the black economy whileclaiming unemployment benefits “ but they still tell a real story of pain. Forthe first time, young professionals are leaving in droves.
Many Spaniards are reassessing their country, reborn throughthe 1978 Constitution after the decades of dictatorship. Franco had tried toexpunge Catalan and Basque identity; the bizarre creation of 17 autonomouscommunities was in part a way to satisfy Catalan and Basque demands for self-governmentwhile camouflaging the concessions in something wider. The system is notworking.
In Catalonia anger is rising. Some 10 percent of theregion’s population of 7.5 million joined a huge independence rally last month.Tax grievances have stoked old urges. But already the Catalan businesscommunity is muttering. Secession would be hugely expensive; the Constitutionbars it. In former times, Spain would have devalued the peseta to regaincompetitiveness; now it is obliged by the constraints of the euro to tackle itsfundamental problems “ a painful but necessary process.
The triumph of practical compromise that usheredpost-dictatorship Spain into the European Union must offer the model fornecessary adjustment “ including possible constitutional reform “ and thebulwark against fracture. Spain is agonising but it is not mythical.
RogerCohen is a British-born journalist and author. He is a columnist for The NewYork Times and International Herald Tribune
