It’s Monday morning and I was reading around the web when I came across this article about Spain’s “lost generation”. It really hammers the point home about the problems that Spain is facing as a whole. All I can see are old people, certainly not the future of Spain and as most of them are doing nicely on their pensions they are oblivious to what’s happening outside their little comfort zone. I’d been hearing for a while now about Spain’s “lost generation” and after seeing the bottom fallout of the construction industry here, you get to understand what it’s all about.
Spain basically put all their eggs in one big “construction basket” and at one stage were building more properties than France italy and Germany together! The economic downturn came and Spain has been left with many properties and developments unfinished. Many of the banks and building societies (cajas) have been forced to take on these properties and become real estate agents as well. It’s a laughing stock and so many kids left school at the height of the boom to work in the construction industry without even finishing their ESO diploma.
Ok, they were earning great money but as an outsider looking in I could never fathom out how the “normal Spaniard” could afford such luxuries like a new flat and a new car to go with it. Now I do. What the great Spanish banks were doing at the time of the boom were handing out mortgages left right and center to every Spaniard and their dog so to speak. Even the immigrants got a look-in and were promptly told where to sign. People from South America namely Peru, Ecuador, Colombia and Argentina were offered mortgages at the drop of a sombrero.
Wise guy real estate offices were springing up all over the country like mushrooms and were selling and buying property like there was no tomorrow. In Spain everyone seems to get a cut of the action, from the bank manager, the mortgage lender, the notary and the real estate office, too. If you couldn’t afford the 20 year mortgage, no problem: How about a 30 or 40 year one? Would that be better? I even heard about some 50 year mortgages that are called “second generation mortgages”. This means that you basically hand down your debt to your kids – awesome!
What was best about this type of mortgage though was the last little spin the bank put on it, a real icing on the cake. “As you are getting this mortgage, why not bump it up a bit more and get the Mercedes C class you’ve always wanted?” Say what! yep, a lot of people were duped into getting luxury cars and putting that on top of the mortgage, too. After all what’s another 30-50k these days?
This surprised me a lot and everyone knows that Spain has a submerged economy but get real. Working class people driving around in BMW’s and C class Mercs? Something’s not quite right here. Fast forward to today and we can see where this has got Spain.
Daniel Lorente has worked in the construction industry, made burgers at McDonald’s, been a camp counselor, telemarketing representative and a doorman.
But Daniel’s part-time jobs have never lasted more than seven months: He was laid off from each one as Spain’s economic gloom deepened into a historic crisis. Now the 21-year-old, like many Spaniards, is staring into a dead-end future.
“How am I going to make it if I don’t have a steady job, to pay a mortgage, for example?” asks Lorente. “Or for a wedding, or anything involving a big expense? You can’t get anywhere.” Lorente is stuck among Spain’s “Lost Generation” of 20-somethings, with no work and no real prospects in sight: Roughly half of all Spaniards between 16 and 24 are jobless, the highest level among the 17 nations that use the euro. It’s a devastating picture of blighted youth that threatens to distort Spain’s social fabric for years to come, dooming dreams, straining family structures and eroding the well-being of a rapidly aging population.
“This puts the whole welfare state at risk,” said Gayle Allard, a labor market specialist at Madrid’s IE Business School. “The young people who are coming on the market now are the lost generation. They are losing the advantage of their youth and energy and that does not come back.” More here.
As I said before, Spain seems to be full of old aged pensioners who are doing quite alright with their pensions. Today, however the youngsters stand no chance of having such luck. Spain has been so hard hit that it seems impossible for this young generation to acquire a house, flat, car or even contemplate getting married or raising a family. Many youngsters are leaving the country and although Spain says “they’ll be back” somehow I don’t think so. What have they got to come home to?
So while Spain wallows in the mire with corruption cases like Camps and the oh so corrupt Valencian government, Iñaki Urdangarin, the king’s son in law, and his nice little number with the Nóos charity he setup, the charges that are being brought against the country’s top judge Baltasar Garzón, they are gradually losing a generation of young people that they will never be able to recover. Add to that the fact that Spain’s birthrate has dropped significantly, Spain is heading for total chaos and mayhem, mostly brought about by greed.
