Eurozone Debt Fears Shift To Spain


Banco de España in Madrid (Photo: Luis Garcia/Wiki Commons)

As Spain's economy has unraveled, Prime Minister Jose Luis Rodriguez Zapatero has dug himself a deeper and deeper hole.

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A growing number of Spaniards say that because the government has not taken decisive action like cutting spending and making it easier to hire and fire workers, Spain lacks competitiveness. And that made putting the breaks on the mounting sovereign debt impossible.

Bond markets punished Spain this week by demanding nearly seven percent interest on 10-year bonds. Seven percent is considered a country's breaking point.

Spaniards, mostly young Spaniards, have been protesting since last spring. They also support labor reforms, although not the kind most economists have in mind.

In a plaza in Madrid, a young man complained about a lack of jobs, and the exploitation of unpaid or low-paid interns.

Spanish companies and universities use hundreds of thousands of interns, often college grads looking for experience and a foot in the door. The experience, they get. The foot? It often gets stomped on.

Octavio Granado is Spain's Social Security chief. He told Spanish radio recently that during this crisis employers have grown too used to calling poorly paid, over-exploited workers "interns."

Using interns is cheaper. And, that's good for companies. But former intern and doctoral student Ester Artells says it traps young people in jobs with no future.

"You get a temporary contract for your doctorate, a temporary contract for your post doc work, then another and another. And you never get a real job," Artells said.

Artells was reached by phone because she works in France now, in Marseilles. She's a post-doc research scientist. She says she's paid well there, and, unlike at home in Spain, jobs abound.

Despite their shortcomings, internships in Spain are still well sought after, because the likely alternative is no job at all. The man likely to be Spain's next Prime Minister is Mariano Rojoy of the conservative Popular Party. He's promising big reforms to get young people working again.

"The first thing we have to do is reform the constitution to set a ceiling on spending at all levels of government so that no one spends what they don't have," Rojoy said. "It's time to tighten our belts."

Belt tightening will inevitably lead to more cuts in public sector services, such as healthcare and education and in salaries.

None of that will be popular. But Spanish voters seems to fear contagion from Greece and Italy more.

Polls show Rajoy's popular party has a big lead over the ruling Socialists going into Sunday's elections.