Alex Henderson

The Political Zone   

Muchas Lágrimas Para España: Why Spain’s Economic Woes Are Also the United States’ Economic Woes 

By Alex Henderson
RealmNoir, August 3, 2012

The news out of Spain isn’t getting any better. Spain’s overall unemployment rate has climbed to 24.8%, and its youth unemployment rate is now a whopping 53%. In other words, one out of two Spanish youths between 16-24 years of age is out of work. And the financial misery facing Spain and other countries in the Eurozone is not only problematic for Spain—it is problematic for the United States as well. 

American banks have a considerable amount of exposure to debt in the more financially troubled countries in Europe. According to a New York Times analysis, five major American banks (including Bank of America, Citigroup, Goldman Sachs and JP Morgan Chase) have more than $80 billion of exposure to debt in the PIIGS: Portugal, Italy, Ireland, Greece and Spain.

The financial news in none of those countries is good. Greece’s unemployment rate was 22.6% during 2012’s first quarter; both Portugal and the Republic of Ireland had official unemployment rates around 14% last month, and the Portuguese government is predicting that unemployment  in Portugal will reach 15.5% this year and 16% next year. Meanwhile, Italy (the third largest economy in the Eurozone) has an official unemployment rate of 10.1% and youth unemployment of 36.2%. And the more economic strain those countries face, the more it will affect the American economy—especially in light of all the exposure that American banks have to European debt.

Spain presently has the worst economic situation in Western Europe, and with economic suffering comes social unrest. Huge political demonstrations in Madrid, Barcelona and other Spanish cities have included violent clashes with riot police; as many Spaniards see it, the police have become nothing more than goon squads for the banksters who have caused so much misery in Europe. Some Spaniards have been voicing their displeasure with the police and their support of the demonstrators by tossing flowerpots from their balconies in the hope that they will land on the heads of la policía.

Strategic planner Gonzalo Lira (LiraSPG.com), reflecting on the unrest in Spain and other parts of Europe, recently told the cable news network RT: “The banks’ profits are obscene. The fact that these governments are bailing them out continuously is simply unconscionable. Now, of course, the people realize this, and they are upset about it. But of course, the politicians do absolutely nothing to rein in the banksters and instead, put out the police to start—to be quite blunt about it—cracking heads.”

The unrest in Spain is showing no signs of decreasing. When a country has 53% youth unemployment with no relief in sight, that’s a recipe for disaster. And the worse things become in Spain, the more the already troubled American economy will be affected. Los problemas de España son nuestros problemas tambíen.

SeXXXandPolitics.com’s Alex Henderson is a veteran journalist whose work has appeared in The L.A. Weekly, AlterNet, Billboard, Spin, XBIZ, Creem, Skin Two, The Pasadena Weekly, JazzTimes, Cash Box and a long list of other well-known publications. He can be followed on Twitter @alexvhenderson. 





La Puerta del Sol in Madrid (above) has been the scene of violent clashes between  demonstrators and riot police. Photos by Alex Henderson.