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The end of Spain?

No, this is not about Euro2012. It is, however, about the Euro.

The Austrian Finance Minister shifted ground yesterday suggesting that the austerity policies would be disastrous and that ‘we need to learn the lessons of the 1930s’, referring to the rise of the Far Right and war.

No one seems to be looking at another option: fragmentation.

While European countries are happy to join with the US in splitting up countries in the Middle East and Africa: Iraq, Libya, Sudan and Somalia, they are more coy when it comes to the ‘Old Continent’.

The austerity madness will cause lasting impacts and it is perhaps too late to change course and expect things to get back to the ‘happy days’ of 2005.

The short run should see an enormous use of monetary firepower by Germany, Northern Europe and France to ‘save Spain’. This will perhaps calm market jitters (actually, they are not scared at all but profiting from speculation, but that’s another story). Saving Spain (i.e. the banks) would still mean rising unemployment for the rest of 2012.

But by November, Syriza should be able to remove the discredited austerity/bailout parties and pull out of the Euro.

That would mean Spain and others such as Portugal leaving the Euro in 2013.

The entire Madrid project post Franco has been about joining the big boys at the high table. Democracy for dollars, as in highways, loans and investment.

The fall of the Berlin Wall took the Germans out of the equation as they looked east.

Madrid carelessly decided to do what all Iberian elites have done since Columbus started the rape and pillage of ‘America’: spend not invest, start a property boom rather than construct decent housing for the majority and completely ignore the need to industrialise with clean technology. The latter was done through subsidies and there are good companies such as the Basque Gamesa but no foundations were laid for a Northern European style economy.

Nationalists were kept at bay by the facade of ‘prosperity’ and the presence of ETA – a godsend to rightwing nationalists in Madrid who could present themselves as defenders of the Realm.

Now that war is over. The economy is in tatters. The concept of Spain is being challenged.

Suddenly, nationalists (especially to the Left) in the Basque country and Catalonia are demanding separation on ‘economic grounds’, not just for historical or linguistic reasons.

If Spain is ejected form the Euro in 2013, then Madrid will find that the centrifugal forces, so long kept bottled up by dictatorship or by the bribery of democracy & dinero, will split apart the state.

There may well be far-right nationalism but that is likely to come from PP, no the independence movement in Euskal Herria and Catalunya.

Instead, expect to see the rise of Left-wing nationalism that attacks the core idea of the Banker’s charter (Americanisation/globalisation) yet wants to join Europe (as Syriza does).

Later on this decade, there will still be something called ‘Spain but it will be without its two industrialised regions which will leave and look North to Berlin and outwards to Latin America and Asia.

Spain without the Basques and the Catalans would be even poorer than today unless,  and this is difficult to see how, there is a seachange in outlook towards the Indignados rather than PP/PSOE.

Already, the Latin Americans are factoring in a downgrade in Spanish power by challenging Madrid over Repsol and other ‘untouchable’ Blue-Chip companies.

Madrid is on the edge of an abyss. The right-wing can forget about the 1930s. In that sense, Iberia is different. There will no longer be any armed conflict. The house of cards is set to collapse.

Bread, not guns, is deciding the future.

Saving the banks is destroying the viability of European states.

 

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