Spain’s Resentment of German Strength (FT 13/4/11)
Migrant surge adds to Spain’s resentment of German strength
Visitors from Spain to Germany, who were once greeted as representatives of a dynamic, fast-growing economy in southern Europe, nowadays risk becoming the butt of jokes about poverty and debt.
A Madrid-based British executive of a German company describes how colleagues mockingly offer to lend him euros when he visits corporate headquarters.
Carlos Cazorla, a 30-year-old Spaniard working at a school in the German town of Uberlingen, who is one of a cohort of recent Spanish emigrants, says his fellow teachers joke that “we must work harder to help Spain” through their taxes.
Most of the jibes are good-humoured, but they reflect German resentment at having to contribute to financial rescue packages for Greece and Ireland – with Portugal seeking a bail-out and Spain periodically at risk.
Like most jokes, they touch on an element of truth: in this case Spain’s sense of economic inferiority embodied by a wave of emigration.
When Angela Merkel, German chancellor, this year invited Spanish engineers and doctors to come and work in Germany, it was a gesture aimed partly at defusing Spanish anger over Berlin’s handling of the eurozone’s sovereign debt crisis.
But it was also an inadvertent reminder of the way the relationship has changed in the past three years, with a powerful Germany reasserting itself as the senior partner and older Spaniards recalling a previous wave of migration by people looking for jobs in the more prosperous north of Europe.
The latest migration is a different phenomenon from that of the 1960s, when unskilled Spaniards moved northwards in their hundreds of thousands to escape what was one of western Europe’s poorest economies, in search of menial work.
Spain is now a developed economy and its latest crop of migrants – 118,000 left the country in the two years to April 2010, according to official statistics – generally have skills to sell (although it turned out that few spoke good enough German to take up Ms Merkel’s offer).
But they are not so much pulled abroad by high pay and good living conditions as pushed out by unemployment at home. Spain’s jobless rate is more than 20 per cent of the workforce, and double that for those under 25.
For Spaniards, the migration may not be as humbling as the last one, but the change in the relative fortunes of Germany and Spain since 2008 is nevertheless a source of angst and mild embarrassment.
Since joining the European Union in 1986, Spain has hitched its economy firmly to the German motor.
Germany – a country also eager to subsume its wartime history into the European project – long had an equally benign view of the Spanish economy.
This was not just a matter of holidaymakers visiting the Mediterranean coast or buying homes in Majorca. German and French banks provided much of the credit to finance Spain’s rapid economic growth and a construction boom that lasted until the property bubble burst in 2007.
Today, however, Germany’s economy is growing, while Spain’s is struggling to emerge convincingly from recession.
Some Spaniards think Germany is doing little to help the economy it helped to build. They accuse Ms Merkel of failing to give them credit for their austerity measures and of undermining the market for Spanish government bonds with provocative statements designed to curry favour with German voters.
“The damage she has done is immense,” said one enraged senior Spanish official shortly after the Irish bail-out in November, when Germany said future rescues should be conditional on private bondholders taking a “haircut” on their investments. “It’s the most stupid and damaging thing I’ve seen.”
José Ignacio Torreblanca, Madrid-based senior fellow of the European Council on Foreign Relations, the pan-European think-tank, says Germany’s heavy-handed approach has alienated previously well-disposed Spaniards, even though they are taking their bitter fiscal medicine as ordered.
“With the financial crisis, people have started to discover that they needed Germany much more than they thought,” he said. “So we now conform to everything Germany does, but we don’t love them any more.”
In Germany, unemployment is falling, demand for skilled labour is rising and wages are high. Mr Cazorla, the Spanish teacher in Uberlingen, earns more than twice the €1,200 ($1,738) monthly salary he made in Spain and says his job is more secure. He has no plans to return home. “For the moment, I’m good here,” he says.
While some Spaniards fret about a “brain drain”, business leaders and economists alike are philosophical regarding the inevitable outflow of skilled youths to more robust economies such as Germany.
Their main concern is that it could be years before the relationship is rebalanced and Spain once again starts to grow faster than its northern partners. What matters, they say, is not whether Spanish engineers are hired in Germany, but whether Spain will ever be able to tempt them back.
This is the second in a series looking at the challenges of living with Germany, a hesitant hegemon
For the full series go to: http://www.ft.com/berlin