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Barcelona’s Crisis Observed

The waiting room at the police station on Nou de la Rambla in Barcelona is full on the day a visiting reporter makes an unwanted detour to help a friend. Barcelona pickpockets are particularly skilled. Stories of wallets and cell phones stolen from right under your nose are fairly common. The station features a 24-hour credit-card hotline to make canceling stolen cards easier. Still, the friendly clerk taking the report says robberies have not increased. Sure, the newly unemployed sometimes try, but, being unskilled, they are easily caught. What has increased is domestic violence. With husbands and wives out of work, adult children moving home, and too many people in the same space with no money and nothing to do, reports of in-home violence in Barcelona have risen 30 percent.

As the European Union’s fourth largest economy, however, Spain’s financial debacle is not just local. And, the dynamic nature of the unfolding crisis is such that by the time you read this many facts may have changed. Earlier this year, the Spanish government was set to accept a bailout approved by both the United States and many European countries. Interest rates skyrocketed. Under protest from its federal government in June, Spanish banks were then approved to receive direct bailouts. A temporary ban on short-selling stocks averted a fallout on the Madrid exchange. In the past month alone, however, stock prices – in Spain and elsewhere – have dropped. Oil prices have dipped in response to investor concerns over the outcome of Spain’s (and Greece’s, and Portugal’s, and Italy’s) crisis on the rest of Europe.

What happens in Spain isn’t staying there.

Lluis Bonet is an economist at the University of Barcelona, and professor of public economy. He sees banks as primary culprits for a Spanish housing bubble in 2008, not unlike the one in the U.S. European banks gave money to Spanish developers to build more houses, and to individuals, as loans, to purchase more house than they could afford. “It wasn’t only the Spanish people,” who were at fault, said Bonet. Prices in Spain prompted second home buyers from Europe to snap up an abundant crop of new homes. After the bubble burst, most of those homes stood empty. Given that Spain began the millennium with a strong budget surplus, Spaniards were as unprepared as many others when the crisis began.

“There is more or less 50 percent unemployment with architects in Spain,” said Cecilia Tham, “so that’s not good for me.” Tham is the founder/manager of MOB (Makers of Barcelona). An American, and an architect by training, Tham went to Spain 10 years ago on a fellowship, and decided to stay. But, as the mastermind behind a pioneering company that provides inexpensive workspace for designers and other independent innovators, Tham is doing okay. Her business also provides opportunities for collaboration and skills workshops to help entrepreneurs succeed. That’s a good thing, given overall unemployment in Spain is just below 25 percent. Young people, like architects, are particularly hard hit, with an equally high rate of unemployment.

Twenty-seven-year old Charles Mclaughlin Piché moved to Barcelona from Canada in 2012. He started an SEO (search engine optimization) company seven years ago with a few clients. Because he could live anywhere and still operate his Internet-based business, Piché moved to Barcelona for its good weather, fantastic beach, and the opportunity to learn a new language. He’s often accused of being on vacation, but Piché, who has a regular workspace at MOB, is “serious about being successful.”

Tham thinks success is possible in Barcelona, despite the bleak outlook. She is troubled by the dilemma of some friends who, in spite of having jobs, haven’t been paid in months. Employers refuse to fire them. But, if they quit, they won’t receive unemployment. “I think the system is definitely failing,” she said. Massive demonstrations by the disgruntled and unemployed, particularly in Madrid, seem ample proof.

But, there are opportunities for the creatively inclined. “The other day,” said Tham, “ I met an American guy who built a massive tapas station on top of eight bicycles so people can pedal while they enjoy their tapas.” She added, “Americans at least have amazing ideas, so the opportunities there will never end.” FBN

 

 

 

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