Brian Holmes on Fri, 31 May 2013 20:23:40 +0200 (CEST)

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<nettime> The Weakest Link: Spain in the Circuit of European Capital

For a few additional links and images see the blog version:

Spain in the Circuit of European Capital

An elder woman with a yard-long wooden spoon stirs a huge pan of paella 
bubbling over a ring of blue flame. Wine bottles pop, music pulses from 
the loudspeakers and the neighborhood gathers around long tables set up 
in the street. Today - May 18, 2013 - eleven families are celebrating 
their departure from the squatted building where they've spent the last 
eighteen months. The bank that owns it, Caixa Catalunya, has been forced 
into granting them five-year leases in other homes left empty by the 
crisis. This is a major victory for the Platform of People Affected by 
Foreclosures, known as the PAH (Plataforma de afectados por hipotecas). 
For the first time, they are rehousing people at a "social rent" of 150 
euros per month. It's a benchmark. The idea is to create new rights from 
the ground up, in defiance of rapacious economic practice and repressive 

In a country with 27% unemployment, two million vacant housing units and 
a foreclosure rate of some five hundred per day, the PAH is a rising 
political force. According to recent national polls, an overwhelming 
majority finds it more competent to resolve the housing crisis than 
either of the two main parties, the conservative PP and the 
pseudo-socialist PSOE, whose ratings have fallen to historic lows. Here 
as in the rest of Southern Europe, the popping of the real-estate bubble 
led to a banking collapse, government bailouts, the specter of national 
insolvency, European rescues, a flood-tide of austerity measures and 
finally, a deep crisis of legitimacy affecting the entire political 
mainstream. How that all happened is a revealing bit of history. What 
happens next could change the course of the global capitalist system.

Two young Marxists from Madrid, Isidro Lopez and Emmanuel Rodríguez, 
offer the most convincing account of recent Spanish economic history in 
their book Fin de Ciclo (End of Cycle). Under the Franco dictatorship, 
without unions or even a free work force, Fordist-type manufacturing 
never attained the dynamic expansionism of the postwar "economic 
wonder." Coastal tourism plugged the gap, installing the construction 
industry as a major sector of the economy and prefiguring Spain's future 
place in the European division of labor. After the 1970s transition to 
democracy, an initial housing bubble inflated in the 1980s and burst in 
the early 1990s. From 1995 onward it was followed by a tremendous influx 
of European capital, "hot money" at cheap interest rates afforded by 
membership in the single currency. Industry was all but abandoned and 
the country's export deficit began to grow, finally reaching a 
staggering 10% in 2008. As part of the same contradictory process, 
Spain's annual GDP growth surged above 4% (which is a little miracle for 
a developed Western European economy) and both political parties abased 
themselves in the rush to pass de-zoning laws and facilitate massive 
construction, driven ahead by the beachfront economy in Malaga and 
Marbella, the creative city model in Barcelona, or the financial 
wealth-effects that deluged over Madrid. Behind the mirage of "knowledge 
based economy" were Northern tourists hungry for sex and sun, and 
structured finance traders pumping up the algorithms of earthly paradise.

During the peak years more housing units were built in Spain than in 
France, Germany and the UK combined. What you can see across the country 
is an ecological disaster. More territory was artificialized from 1986 
to 2007 than had been from the Neolithic era to the mid-1980s. 
Employment broadened and salaries rose, while the state used tax 
revenues for an infrastructure splurge: highways, trains, airports, etc. 
Credit schemes reached deep into the population: fully 87% of households 
were the nominal "owners" of their dwelling before the bubble burst. Yet 
many of these new borrowers were precarious workers in the service and 
construction sectors. Their mortgages were bundled into collateralized 
debt obligations, just as in the US. However, Spanish finance does not 
enjoy all the imperial privileges: the riskiest and most profitable 
tranches were not palmed off on the global markets, but instead left to 
rot on the books of the semi-public provincial savings banks, or Cajas 
de Ahorro, which began their slow collapse amid the international credit 
crunch of 2008.

Bust follows boom, just like clockwork. First came the bank failures, 
the government bailouts and the concentration of the credit sector, 
including the merger of seven Cajas into a mastodon called Bankia 
(nationalized one year after its foundation in 2011). After that came 
the dramatic upward climb of interest rates on government bonds as 
speculators started manoeuvering for a possible kill (ie, a Spanish exit 
from the Eurozone). On June 9, 2012, panicked Eurogroup negotiators 
forced the Partido Popular into a restructuring deal in exchange for a 
100 billion-euro credit line. A month later, on July 26, the new 
European Central Bank head Mario Draghi announced that the ECB would 
purchase government bonds from member states in whatever quantity 
necessary. The speculators backed off, and at that point the crisis left 
the realm of finance and became thoroughly political.

Austerity is the code-name for a governmental operation that shifts the 
costs of financial breakdown onto national populations, with the aim of 
destroying redistribution programs and restructuring public institutions 
such as health care, education and retirement programs. It is carried 
out with the aim of restoring asset values in the eyes of international 
investors, chiefly by reducing wage levels and public deficits. In 
Spain, austerity has taken the form of multiple tax hikes, public-sector 
pay cuts and layoffs, stark reductions of services and the maintenance 
of a century-old mortgage law that leaves debtors bound to repayment 
even after repossession of the home by the bank. Despite widespread 
warnings of the downward spiral that such cuts will inevitably bring, 
the German political-economic elite and the Partido Popular have forged 
a kind of sadistic alliance in the demand for further austerity 
measures. On the Spanish side this punishing stance is exacerbated by 
neoconservative moralism, including harsh police repression of 
protesters and a recent abortion law pushing women back to coat-hanger 
days. Meanwhile, every effort is made to re-inflate the 
construction-finance complex, particularly now as tourism kicks up with 
the return of stock-market profits and wealth-effects in Northern 
Europe. This strategy is generally seen as a last-ditch effort to 
advance the corporate conservative agenda as far as possible during the 
PP's remaining two years in power (the party's radical decline in the 
polls making reelection almost inconceivable). The goal would be to 
leave the population hopeless, impoverished and exhausted, as seems to 
be the case in Greece. Yet the irrational severity of some measures 
suggests there might be an even more sinister aim: forcing a violent 
confrontation in order to impose an authoritarian solution.

The Spanish left is on its feet, presenting clear threats to 
neoconservative policies. The Indignado movement - more commonly known 
as 15-M, for its starting date on May 15 - was able to last the entire 
summer of 2011, before deciding on its own dissolution into neighborhood 
committees. The movement built on the mobilizing capacities inherited 
from the alterglobalization activism of the early 2000s, with its 
hacklabs, no-border camps and autonomous organizing of the precarious 
workforce. But now there was something new: a collapsing middle class 
that discovered the informational and organizational potentials of the 
Internet even as it lost much of what formerly defined its social status 
(financial assets, professional job security, high-end state 
entitlements). The occupied plazas and encampments saw the birth of a 
new political generation, which is a community of fate, debate and 
proposition, and not an age-category. The emergence of a vast embodied 
movement from that invisible labyrinth of rants, feelings, desires, 
snippets of information and philosophical discourse known as Web 2.0 
brought the word and the reality of technopolitics to the forefront of 
the protest movement, along with the famous hashtag #spanishrevolution.

There were plenty of urgent questions to debate out in the streets two 
years ago, and there are even more today. Widespread proletarianization 
is still partially masked by family support networks and the usual 
reluctance of the middle classes to admit how close they are to the 
precarious, the unemployed and the excluded. And yet precarization and 
outright proletarianization is hitting millions of people, just as it is 
in the US. The explosive popularity of the PAH housing activists - 
including large numbers of Latin Americans and other immigrants who 
stand directly against the racism of the far right - is part of the 
aftermath of 15-M. So was the impressive encirclement of the Congress 
building in Madrid last September 25, an initially non-violent action 
which saw intense police repression as the government hysterically 
denounced an attempted coup by "anti-system" forces. More recently, 
large concentrations of citizens in support of public education and 
health-care services, known as "tides," have begun appearing in urban 
centers. These protesters are not the usual suspects, but instead 
embrace a wide range of the population shocked by the naked corruption 
of the elites, and directly threatened by it as well. The likelihood of 
future mass uprisings? Under current conditions, they're almost certain.

Since the encircling of the Congress, and in many cases, since M-15, 
Spanish intellectuals on the left are talking openly about a double 
movement of destitution / constitution. Their aim is to topple the 
existing two-party system and transform the very fundaments of the 
democracy inherited from the 1970s. As the PP and the equally corrupt 
PSOE hit their nadir in the polls, a plethora of new splinter parties 
has arisen. The former communists - now called Izquierda Unida - are 
gaining broader popular support thanks to the straight-talking of 
Alberto Garzón, who at 27 is the youngest serving representative in the 
current Congress. If the cutbacks continue with their current ferocity, 
as everything currently indicates they will, then an electoral shift 
seems overwhelmingly likely, in which even a partial union of forces 
would bring a left coalition to power. The whole problem is knowing what 
to do with that power, and knowing how to keep it from becoming a mere 

The failure of the left-wing Syriza party to form a government in Greece 
last year makes it clear that despite the punishments of austerity, a 
majority will chose to remain within Europe - while powerful outside 
forces will proclaim that any left opposition must necessarily lead to 
breakup. It's true that the consequences of a Spanish exit from the 
Eurozone would sweep across the global capitalist system. Already 
weakened French and German banks together hold almost 50% of Spain's 
foreign debt, which is far larger than that of Greece. It is widely 
believed that the collapse of the French and German banking sectors 
would bring on a full-fledged global depression. Yet nothing can prevent 
a determined political force in a country as large as Spain from 
refusing the EU austerity measures and forcing radically different 
negotiations. If framed and timed correctly, as Isidro López argues, 
this threat to the neoliberal status quo in Europe could win the 
adhesion of the other Southern member states, as well as France and 
Ireland. This is the paradox of the European Union today: only the 
threat of exit makes any kind of "voice" - that is, real political 
negotiation - even remotely possible. And only such a threat, at the EU 
level, can give substance to the strategy of destitution/constitution 
currently being explored at the national level in Spain.

"YO NO ENTRO EN TU LEY" reads the sign held by a PAH protester in 
Barcelona. "I don't fit into your law." By creating radical facts on the 
ground in the form of occupations, privately negotiated social rents and 
massive tides of protest coordinated by sophisticated technopolitical 
networks, while simultaneously mobilizing both electoral forces and a 
guiding philosophy for the seizure and use of institutional power, the 
Spanish left is rediscovering the almost forgotten and seemingly archaic 
concept of autonomy. Autonomy is neither a right nor an essence nor even 
a persistent condition, but instead, the endless process whereby the 
collective self (autos) creates its own law (nomos). In this case it 
entails creating new social rights - ones that are based, not on social 
property as under the welfare state, but instead on a theorization of 
commons - as well as original forms of critical participation using 
technopolitical means to ensure that government is not hijacked by 
interest groups. For sure, this emergent process of autonomization is 
only made possible by the stark heteronomy of capital's resurgent law of 
accumulation, which concentrates wealth among a few while imposing 
proletarianization on the many. In our time, political autonomy is a 
fruit that can only be plucked from a toxic desert. Yet these are the 
chances of human existence, singular and accidental, without any guarantees.

Obviously nothing concrete has yet been achieved. Obviously this is a 
desperate confrontation where the weaker side - our side - can easily 
lose. And just as obviously, the entire scenario described here could be 
annulled by the controlled drawdown of austerity, the stimulus of a few 
exclusive profit centers (bricks and mortar, again) and the stifling 
return to the status quo of a failed but immensely powerful system. 
Obviously we can all just stagger on like zombies greeting the 
everlasting dawn of the dead. But for anyone who wants out of the 
endless rerun of finance capitalism, the Spanish left - the weakest link 
in the circuit of European capital - is once again a radical force that 
deserves your active attention and your living support.

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