Government Response

The outbreak of the crisis caught the newly-formed PSOE-UP progressive coalition government by surprise. Worse, now we must add an impending economic crisis into the mix, one that all analysts consider inevitable. The Spanish economy is strongly dependent on tourism and suffers from a structurally high unemployment rate, even in boom periods. After years of weak growth, fundamentally based on suppressing wages and the growth of the precarious labor market, unemployment currently stands at 14 percent and is expected to rise above 20 percent in the coming weeks. If the health crisis continues, this could have ruinous consequences, including the closure of thousands of small businesses and an unprecedented economic paralysis.

Despite its outward unity, the government is divided over the way forward. Its most orthodox sector, led by deputy premier Nadia Calviño, firmly defends a policy of limiting state spending as much as possible in the face of the crisis. Trained at the highest summits of the European Union bureaucracy, Calviño presents herself as a guarantee that financial capital’s fears of big public deficits won’t be realized. Unidas Podemos, with relatively little weight in the executive branch compared to the PSOE, has proposed a series of palliative social measures to prevent a social disaster; however, it has achieved few results thus far. Here, the government’s left-wing members need to enact policies that meet people’s basic needs — for instance, by guaranteeing their rent and mortgage payments, and providing a minimum income for those sectors hardest hit by the crisis.

However, this crisis may run even deeper. The reality is that Spain is a peripheral economy, extremely dependent on international financial flows. In today’s context, where the health crisis intermingles with an economic crisis, any Western government would be forced to take a series of measures to guarantee minimal survival for the population. The fundamental dilemma that governments face is whether to address this problem by way of wealth redistribution, i.e., by levying taxes on those most able to pay. So far, the PSOE-UP government has ruled out taking steps in this direction: neither has it increased taxes on large companies or big fortunes to cover new expenses, nor has it demanded that banks return the €65 billion that the public treasury spent to bail them out during the last crisis.

The government’s labor policy has, instead, aimed to mitigate rising unemployment by cushioning layoffs through a mechanism known as ERTE (Temporary Employment Regulation Measure). ERTE involves companies suspending employees for a specified period. During this period, Social Security is responsible for paying workers’ wages and the employers’ contributions to the state. This measure can be useful for in-trouble small firms and cooperatives, but it is scandalously lucrative for large companies. It socializes big employers’ wage costs without increasing their contributions to a public fund — thus forcing the state to either rely on funds that were destined for social services or to borrow in the international markets.

Coming Austerity

The logic of this political economy is, undoubtedly, a prelude to a new period of austerity. The extent of the health crisis remains incalculable — and its rhythms are those of a country in shock. The hegemony of the biopolitical moment induces new fears and generates new tensions in response to the crisis, where cooperative urges coexist with fear and the yearning for order.

The population has reacted with solidarity in neighborhoods and cities, forging examples of mutual support. Every evening at 8 p.m., millions of people go out on their balconies to applaud public health workers, even as they find themselves unable to leave their homes. But confinement measures also create powerful inequalities.

Thus far, the government has refused to declare the closure of nonessential productive sectors, leaving millions of workers exposed to the spread of the virus. And, along with the recognition of the importance of public health, the state of emergency has also begun to strengthen the role of the police and the military. The first abuses of their power are now appearing on the streets.

Faced with this uncertainty, social movements and the anti-capitalist left have explored different responses to the crisis. Community organizing has been decisive in articulating a neighborhood-level response, for instance, by checking in on neighbors and communicating with medical professionals. But it is obvious that in a Western capitalist society, the weight of the state remains enormous. This is what the Italian Marxist Antonio Gramsci called the “integral” relationship of state and society — in such a crisis, the state does not disappear (even if its welfare apparatus retreats), but it instead re-articulates the social relations around it.

In this sense, the first challenge today is to avoid a catastrophic social collapse that further pulverizes the already precarious social conditions of the working class, including the rights and guarantees they are afforded by the state. In this sense, hundreds of organizations have together launched a campaign called the Social Shock Plan, designed to push the government to adopt a series of emergency measures. These measures include the suspension of rent and mortgage payments, raising state revenue by increasing taxes on the wealthyextending public services, and guaranteeing a minimum basic income for the entire population.

It is difficult to know how long the crisis will last. But looming in the background is a global economic crisis — with likely brutal repercussions for an already-weakened Spanish economy. The progressive government is caught between its loyalty to financial capital and urgent social demands. All the while, the neo-fascist right wing lurks, concentrated in the Vox party. While it has not been able to assume a leading role so far — and has in recent weeks been weakened by corruption scandals surrounding the monarchy — the far right will try to rearm itself based on popular fear and the “statization” of society produced by the security forces’ new authority.

Amid the large-scale suspension of social life, we find ourselves in an unprecedented situation. When the day comes for us to leave our homes again, we will find ourselves living with more poverty, more unemployment, more debts, and more social cuts, with the rich even richer. The new period following the coronavirus crisis generates many unknowns and uncertainties. It is time to prepare to face them.