Otros temas relevantes

The transition to democracy was followed by a loss in the vitality of working-class activism. Not only did the fall of fascism deprive the worker’s movement of a clear enemy to cohesion around, but its sources of militancy ran up against their own contradictions. On the one hand, the neighbourhood movement, hitherto based on securing demands from the state, ceased to be an autonomous political force when its grassroots energies were channelled into state structures, where they gradually dissolved (De Terán, 1993:347). On the other hand, factory activism met an important strategic defeat when the first left-wing party in power in forty years, the social- democratic Partido Socialista (PSOE), proceeded to enforce draconian de- industrialisation and liberalisation policies throughout the 1980s.

The enforcers of the post-industrial transition proceeded to reformulate the idea of economic progress – hitherto associated with industrialisation – around the milestone of European integration. The idea of converging with the mainstream nations of the continent was cherished by the Spanish populace. The exclusion of fascist Spain from the league of European democracies had long symbolised the country’s backwardness. The indexation of Europe as a standard of socioeconomic advance was already present

in the discourse of the urban movement of the 1970s: ‘we paid for [this city] with our days of work and our very non-European salaries […]’ (Martínez, 2011:67, emphasis added). In the 1980s, PSOE’s electoral strategy capitalised upon this association in order to galvanise the broad popular desire to depart from fascist obscurantism. Europeanisation became the benchmark of this departure, enabling the government to frame policies, however unpopular, as a necessary sacrifice to achieve this objective. Thus, PSOE’s strategists built a chain of associations that linked the transcendence of fascism to their own party’s success, all mediated by the objective of getting Spain into the European Economic Community. At the time, these connections were often spelt out by high-ranking PSOE members. The party’s Secretary General put it this way in 1985:

Despite criticism […] the socialist project enjoys an unspoilt consensus in public opinion. […] large masses of voters perceive the message of modernisation and regeneration in the policy of European integration, industrial reconversion, welfare reform, and devolution (Benegas, 1985).

The socialists’ delivered on their promise in 1986, when European membership came into force and was immediately followed by a funnelling of capital investment into the real-estate sector. Completing this cathartic moment of international recognition, that same year Barcelona was selected to host the Olympic Games of 1992. Indeed, the political capital of having presided over this transition allowed PSOE to stay in power until the mid-1990s, despite the recession of this period (i.e. ERM crisis) and the relentless corruption scandals besieging the party (see chapter 3).

As the indexation of European integration and economic progress continued uncontested, a process of ‘semiotic reversal’ kicked in (Konings, 2015:58). Europeanisation ceased to be a mediating link within a broader chain of signifiers that justified a particular path toward economic progress, and instead became an end in itself, a mandatory reference for the Spanish political imaginary. Given the increasingly neoliberal bent of the European project, this became a lasting self- inflicted wound for the Left. To lay the groundwork for monetary integration, the Maastricht Treaty of 1992 stipulated a number of ‘convergence criteria’ for prospective members of the currency union, including a cap on public deficits and strict inflation controls (Navarro et al., 2012). When the neoliberal conservatives of PP rose to power in 1996, they gladly embraced these commitments and proceeded to engage in a frenzied privatisation of state assets between 1997-9 in order to lower the deficit and

secure Spain’s entry into the Eurozone (Tudela, 2015). This brought Spain into the Eurozone against all odds, given that to navigate the recession of the 90s the previous government had broken the Maastricht criteria by engaging in successive currency devaluations. Entry into the Eurozone was celebrated as a milestone of economic ‘modernisation’, a process accompanied by booming growth driven by renewed investment in Spanish real estate.

The legitimation of these processes was assisted by the validation received from the international press. In a much-commented piece, the American magazine Newsweek celebrated the arrival of a ‘Spanish economic miracle’ under the auspices of PP’s neoliberal reformers (McGuire & Radcliffe, 2004). The American magazine highlighted the country’s successful process of European convergence after a series of privatisations and liberalisations:

it's no wonder Spaniards these days are the most optimistic consumers on the Continent, according to surveys. […] Attracted to this new Spain, expats are returning and, perhaps more tellingly, other Europeans are seeing their neighbour in a new light. […] Spain is the new princely peacock, after being looked down on by the northern Europeans as a poor Mediterranean country.

Perhaps unbeknownst to them, Newsweek had summoned the spectre of Francoist developmentalism. The article was widely echoed by the conservative media, who mobilised the discourse with revanchist undertones. The first right-wing government since the fall of the dictatorship – headed by a party founded by Franco’s ministers – had supposedly come to save the economy from a long, failed left-wing experiment (Estefanía, 2013). But when a new PSOE administration from 2004 picked up the baton of PP’s neoliberal policies, the metaphor was adopted by media outlets aligned with the centre-left. For example, a 2007 analysis in the newspaper El País, the spiritual guide of the social-democratic electorate, celebrated Spain’s economic success within the European Union under the title ‘The Spanish Economic Miracle’ (Missé, 2007).

In the context of this neoliberal consensus, the idea of a ‘second coming’ of the Spanish miracle tapped into a cultural memory of immense symbolic power. After all, the comparison with the 1960s was not that far-fetched. At the centre of the growth of the 2000s was an extremely buoyant property market devouring the Mediterranean coastline as well as 50% new job posts to cater for a reinvigorated residential apparatus

(Von Zeschau, 2011). The ‘old’ developmentalism justified the sacrifices of precarity and reckless urbanisation with the promise of economic progress; an idea that lost its lure when it became evident that such progress would not be shared amongst those who had sacrificed the most. The ‘new’ developmentalism entailed a similar trade-off. However, its appeal was much stronger as it managed to deliver on its promises through the magic of financialisation. Even as wages went down, the homeowning majority was seemingly getting richer (see below). In short, the result was a ‘reactivation’ of the old cultural associations binding together property, development, and property development.

It was also no small detail that this ‘miracle’ came through the Euro, as the symbolic authority of Europe conferred veracity on its ‘miraculous’ effects. Pro-European sentiments ran high in this period: in 2004, 69% of Spaniards believed to have benefited from EU membership (Eurobarometer, 2004). For most, the cost of European convergence (de-industrialisation, privatisations, liberalisations, etc.) had seemingly paid off – Spain had left fascist backwardness behind to join the first rank of European nations. However, if in the 1980s the idea of European integration had to be justified with promises of modernisation and regeneration, by the 2000s, the idea of Europeanisation had become an authoritative source of meaning in itself. Herein lied the distinct power of the ‘second coming’: it reanimated an exhausted sign of economic progress – i.e. reckless urban development – with the power of the sign that had replaced it – i.e. Europeanisation.

Tapping into these home-grown affective connections, the speculative prowess of the housing market was restored as an icon of macroeconomic success. Real estate expos were encouraged by the visits of high ranking public officials, who referenced them as an indicator of the vitality of the economy, and the news media began to measure the economic prowess of Spain by the number of housing units built every quarter (e.g. Cabrales, 2006). In this triumphalist atmosphere, disturbing the real-estate sector did not seem politically convenient. Miguel Sebastián, a prominent minister during the PSOE years of the bubble, would later admit the difficulty of ‘stopping the music in the middle of the party’, as it would have ‘triggered an enormous reaction’. After all, ‘the people were happy’ (quoted in El Mundo, 2015).

5.3. ‘Home Prices Never Go Down’: A House-Price Keynesianism

The previous two parts have shown how in the decades preceding the bubble Spain developed a layered terrain of discourses and practices that would make its housing system prone to the processes of mass property speculation during the 2000s. The purpose of this final part is to move beyond these enabling conditions to show how the integration of everyday homeowners into the circuits of financial speculation actually happened. Without delving too deep into the financial techniques that made this possible (a theme reserved for the next chapter), it will be shown how the defeat of the working-class movement of the 1970s pushed many homeowners – by then the vast majority of Spaniards – to rely on the rising value of their homes to compensate for the fall in their wages. The examination of this process, described here as a form of ‘semi- proletarianisation’, will be followed by an analysis of the channels through which the public was educated in the values of risk, debt, and property speculation. This will culminate in an examination of how, and when, the state began to encourage mass property speculation as a means of demand-management, what Watson (2010) refers to as ‘house-price Keynesianism’. Altogether it will show how, if only temporarily, rising home values became an icon of personal wealth and macroeconomic stability, further magnifying the effects of the bubble.

5.3.1. Leveraged Investors: The Semi-Proletarianisation of Homeowners