Macro figures about Spanish economy’s take-off are too obvious to ignore it, The Economist reckons, however points out that “in Brussels these days Spain is hailed as a prodigal son of the euro zone’s troubled southern periphery.” When wondering who saved Spain, they suggest ECB’s chairman Mario Draghi’ s promise in 2012 to inject liquidity in the euro zone if necessary was crucial. Also PM Mariano Rajoy’s reforms, which drove the country to an internal devaluation.
The concept internal devaluation might be used sometimes just an economic term, as a tool to adjust an economy for pushing competitiveness up, without sufficiently considering the social injustice it means for the citizens that must devaluate their purchasing power. This is not new. Keynes already linked internal devaluation to social endurance.
“An internal devaluation as strong as this Spanish economy undergoes, with salaries and consumption falling, is a very difficult process. It requires a long time and involves a high social discontent,” a professor in Alcalá University Antonio Torrero Mañas recently said.
It is truth that Spain’s internal devaluation is unavoidable in order to get out of the crisis. It is to appreciate that Anglo-Saxon media recognize the internal devaluation is crucial in the country’s economy recovery. However, it is important to underline everywhere and everyday that behind this magic internal devaluation underlies the effort of millions of Spaniards whose living conditions have been downgraded.
Spaniards have seen their salaries cut by an average of 10% since the labour reform began two years ago. The indemnity in the event of collective lay-offs stands at an average of 26 calendar days per year worked against previous 40 days. Contracts in medium and small companies, which set 90% of Spain’s corporate landscape, doubled to 16%.
Furthemore, 27% Spanish households depends on retired people pensions, who are even paying mortgage loans that their sons and daughters cannot pay. Pensioners mean 8 million people in Spain, which represents 18% of overall population. The average income per person over 65 reached yearly €12,720 while families with members between 45 and 65 hardly climb to €12,000. Those under this age have an average income of €11,120. The youngest households between 16 and 29 years are only paid €7,857.
If social discontent in Spain did not burst into pieces, it was not because of Spaniards patience, but of families solidarity. If Spain’s returned to the growth path it’s not only thanks to macroeconomic figures.