The First Cut Isn't The Deepest: The economic pain in Spain

The UGT union has called a general strike for 20 May. What a surprise. Government announces various measures to deal with Spain's deficit, including an average five per cent cut in salaries for public workers as from this June and, as sure as night follows day, the union mobilises. A reconstructed leftie, such as myself, should, despite the reconstruction, still be supportive of the union. But I'm not. No one cuts my earnings, other than the market. There is no union to take to the streets and demonstrate against the annual inflation in my social security payments, despite the more difficult market. I lump it. A salary cut in the public sector still means a job. President Zapatero could have cut far deeper. Perhaps he should have done. You only have to recall some of the figures that were quoted recently in respect of the growth in public employees in Mallorca's town halls, and the overall salary burden, to get a handle on the degree to which the public sector has, like Topsy, grown.

The spend on town hall personnel has doubled in the last ten years and has helped to fund the absurd levels of duplication at different levels of government. If they were, for example, to scrap the Council of Mallorca completely, it might be interesting to see what effect, if any, this had on the running of public administration. When you have a regional government, town hall administrations for even small population centres and one town hall, Palma's, that acts like its own mini-government, why on earth do you need the Council? No one has ever given me a good reason. There are almost 62,000 public employees in the Balearics, consisting of 32,000 in the regional government, almost 13,000 working for the state (Guardia Civil, for example), something over 13,000 in the town halls and 2,650 in the islands' councils. The loss of jobs would amount to less than 5% of the total but it would be a hefty saving. They should, for starters, get rid of the Councils.

Zapatero has not announced wholesale redundancies. Cuts in wages may be politically unpalatable, but adding to the national level of 20% unemployment would be to announce the PSOE's own death sentence. The union is posturing. Or worse, it is inviting a similar level of social unrest to that in Greece. There is, in all likelihood, more to come in terms of an overhaul of public administration and public spending, in addition to the cuts already announced. In respect of the latter, public spending, the cuts were insufficient to steady the shaky Ship Spain, but they were also necessary, even if they fly in the face of the strategy of the country public spending its way out of recession. One might hope that there is now to also be a more rigorous analysis as to the real necessity of some public projects. Like Alcúdia's Can Ramis. While it is glibly said that the building cost one million or so euros, think of it this way. If you were to be given a million euros to build a house, forgetting cost of land which has already been dealt with, what might you expect for your money? An awful lot more than Can Ramis, I suspect. How on earth did it cost this?

The more that should come should entail a fundamental review of the system of public administration. And of working practices, including hours of work. Some progress is being made in cutting the inefficiencies of some public service, e.g. the move to allow for driving licences to be renewed at local testing centres rather than at the Trafico building in Palma. It's a start. But just as it took, and I hate to have to say it, a sharp dose of Thatcherism to whittle away at the bloated nature of British public administration, so Spain needs something similar, along with a cultural shift in favour of the public as customer.

One can argue, with justification of course, that it was the private sector (the banks) that brought about the need for public sector reductions. Not my problem, Jack, in other words. Perhaps, but the meltdown merely highlighted where the system had wrong, not only with the banks but also with public administration.

The cuts are just the beginning.


Any comments to andrew@thealcudiaguide.com please.