Business, Economics and Jobs

Trust erodes in the European Union


Visitors look at screens in Madrid's Stock Exchange on Aug. 4, 2011 in Madrid, Spain.


Javier Soriano

MADRID, Spain — As the media chronicles the eurozone’s economic troubles, headlines trumpet the growing disillusionment of the European Union’s northern countries with the economically troubled south.

But the feeling is mutual.

Spain, which has received billions of dollars in aid since it joined the EU in 1986, is souring on the union.

“All the measures that the EU imposes cut back on people’s rights,” said Manuel Perez, a 55-year-old fruit and vegetable seller in a market in downtown Madrid.

A decade ago, Perez saw EU membership as altogether more positive. But his opinion has changed in recent years, especially since the economic downturn hit.

“The people in Brussels are just like the politicians we have here. Now that we’ve got a crisis on our hands we’re seeing the worst side of them.”

It’s not just the opinion of ordinary Spaniards that has turned against the EU. In the political arena, Spanish Prime Minister Jose Luis Rodriguez Zapatero’s willingness to follow economic reforms prescribed in Brussels has led to him facing accusations of ceding national sovereignty.

For Fernando Vallespin, a professor of political science at Madrid’s Autonoma University, disenchantment with the bureaucrats based in Brussels, Europe’s administrative capital, is not exclusive to Spain. What is unique to Spain is how importance of the European project was to the country. The dictatorship of Francisco Franco, who governed Spain from 1939 until his death in 1975, created a yearning to belong to the club.

“The dictatorship meant that Spain was isolated in international terms,” said Vallespin. “That started to change in a very timid fashion in the 1960s, with the arrival of foreign tourists. Europe became something akin to El Dorado for Spain.”

El Pais newspaper once declared that joining was “the reaffirmation of a European destiny that we must never abandon.”

The appeal of the European economic bloc was twofold: it represented an end to economic isolation as well as a political guarantee of democratic stability.

“It was a win-win situation for Spain,” Vallespin said.

With its economy rapidly growing and the Socialists and conservative Popular Party each taking turns to govern, Spain’s economic and political integration was assured. The country passed the economic tests to join the new eurozone currency bloc in 1999 with flying colors and further burnished its European credentials in 2005 by approving the EU Constitution in a referendum (France and the Netherlands both rejected the document the same year).

But Spain’s success had a downside. The country’s rapidly increasing GDP per capita had surpassed the bloc’s average by the end of the last decade — partly due to the inclusion of eastern European countries in the bloc — putting it on a similar level to France and Italy. This meant Spain became a net contributor, rather than recipient, of bloc funds.

But the real problem is an economic downturn that has left Spain with almost flat growth, a high deficit and Europe’s highest jobless rate at 21 percent, said Ismael Sanz, an economist at Rey Juan Carlos university in Madrid. The ongoing sovereign debt crisis only makes things worse.

“There’s a part of the population that sees the European Union as an institution that supports neo-liberal economic policies, which are not very popular here in Spain,” Sanz said. With conservatives in power in Germany and France, the EU’s most influential countries, that notion is reinforced.

Zapatero, a Socialist, has battled to fight off the damaging market speculation of recent months with a series of controversial austerity measures. He has frozen pensions, raised the retirement age, cut jobless benefits and civil servants’ wages in a bid to slash the deficit.

Both ends of the political spectrum have criticized such reforms as kowtowing to Brussels.

“They came over here and set us homework and as a Spaniard I don’t like being told what to do,” said conservative opposition leader Mariano Rajoy in February, after the EU had reportedly suggested to Zapatero that he implement new austerity measures.

Moreover, while Spain has received, for example, 3.5 billion euros in EU money for the high-speed rail link between Madrid and Barcelona, the country will have to contribute billions to the bloc’s bailout fund.

For Vallespin, the creation of the “PIIGS” acronym, bracketing together the supposedly fiscally unsound nations of Portugal, Ireland, Italy, Greece and Spain, reflected an ongoing problem that the continent’s debt crisis highlighted: However much integration had taken place, Europe still had two tiers. Spain was still not considered in the same category as France or Germany.

“The problem was that we all stopped trusting each other somewhat,” said Vallespin. “The poorer countries resent the fact that the wealthier countries treat them like second-class citizens and the rich countries feel that we’re the cause of the problem.”

The problem of trust was at the heart of recent news on the EU’s bailout of Greece: Finland, Austria and The Netherlands demanded Greece put up collateral in exchange for their loans. The move could jeopardize Athens’ bailout package.

Polls show that over two-thirds of Spaniards still see benefits in being part of the EU. But those early days when the funds rolled in and the country’s credibility swelled now seem long gone.

As Manuel Perez stacks crates of fruit and vegetables at the start of another day in the market, his disillusionment is clear.

“Everything they’ve given us over the years, for the high-speed train and so on, one day we’re going to have to pay that back with interest,” he says.

Editor's note: An earlier version of this story was published in error.