Anti-Austerity Fervor Rages in Spain and Portugal

The protests in Madrid was the the third large-scale protest in a week and followed directly on Friday's announcement by Prime Minister Mariano Rajoy of the government's 2013 draft budget that will cut overall spending by $51.7 billion, freezing the salaries of public workers and cutting unemployment benefits.

"The danger is not only that these austerity measures are killing the European economies but also that they threaten the very legitimacy of European democracies..." --Ha-Joon Chang, Cambridge Economist

Al-Jazeera reports from Madrid:

Chanting that politicians must resign, the demonstrators surrounded parliament [...] facing off with riot police and denouncing the conservative government's deep budget cuts.

Rallied by the ["Indignados"] protest movement and organised on social media, the protesters held up signs that said simply "No", "Resign" and "Democracy" and shouted toward the legislature: "They do not represent us".

And the Associate Press reporting from Portugal, where the government's austerity proposals are even deeper than those in Spain, adds:

In Lisbon, retired banker Antonio Trinidade said the budget cuts Portugal is locked into in return for the nation's $101 billion bailout are making the country's economy the worst he has seen in his lifetime. His pension has been cut, and he said countless young Portuguese are increasingly heading abroad because they can't make a living at home.

"The government and the troika controlling what we do because of the bailout just want to cut more and more and rob from us," Trinidade said, referring to the creditors - the European Commission, the European Central Bank and the International Monetary Fund.

Al-Jazeera reports on the violence unleashed by Spanish security forces that came at the end of what was an otherwise peaceful day of protest in Madrid:

Writing about what's driving the popular movement in Europe--and to some extent in the US--professor of economics at Cambridge Ha-Joon Chang says it is a reaction to the rise of global capitalism that pushes an austerity agenda which he describes as "nothing short of a complete rewriting of the implicit social contracts that have existed since the end of the second world war."

Chang continues:

This rewriting in many European countries is an unprecedented one. It is not simply that the scope and the speed of the cuts are unusually large. It is more that the rewriting is being done through the back door.

Instead of it being explicitly cast as a rewriting of the social contract, changing people's entitlements and changing the way the society establishes its legitimacy, the dismembering of the welfare state is presented as a technocratic exercise of "balancing the books". Democracy is neutered in the process and the protests against the cuts are dismissed.

On Saturday, however, and much of last week, it was hardly the people on the streets of Lisbon and Madrid being ignored.

And more importantly, as Princeton economist and Nobel laureate Paul Krugman wrote last week in column titled "Europe's Austerity Madness," the people in the streets across Europe "are right."

"More austerity serves no useful purpose," Krugman said, and argued, "the truly irrational players here are the allegedly serious politicians and officials demanding ever more pain."

And Chang concludes: "The danger is not only that these austerity measures are killing the European economies but also that they threaten the very legitimacy of European democracies - not just directly by threatening the livelihoods of so many people and pushing the economy into a downward spiral, but also indirectly by undermining the legitimacy of the political system through this backdoor rewriting of the social contract."

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