Austerity in Spain: a failed ideology

The document argues that Spain's adherence to EU-mandated austerity—termed the 'Euro Dogma'—has deepened its recession by contracting aggregate demand and undermining public services. It criticizes the Popular Party's labour reforms for reducing worker protections and wages without addressing the root causes of the crisis, such as the property bubble and lack of technological investment. The author highlights significant cuts to R&D, education, and health, while noting that military spending and grants to the Catholic Church remained relatively protected. The text suggests that Spain could instead leverage its human capital and renewable energy potential, and increase revenues by tackling tax evasion and taxing the wealthy, to achieve a sustainable recovery.

• The author contends that the 'Euro Dogma'—an ideological focus on fiscal discipline and expenditure cuts to regain market confidence—is creating a vicious cycle by contracting aggregate demand and depressing government revenues, which in turn increases the risk of default for systemic economies like Spain and Italy.
• Spain's economic crisis is attributed to an unsustainable growth model based on private debt and a property bubble rather than structural public spending issues; the document notes that before the financial crisis, Spain had a budget surplus and nearly optimal public debt levels.
• Labour reforms introduced by the Popular Party (PP) are described as undermining unions and working conditions by minimising dismissal compensations and allowing enterprise-based agreements to overrule sectoral ones, which the author argues leads to social devaluation and increased inequality.
• The Spanish government has significantly reduced funding for science and education while maintaining other expenditures; R&D cuts amounted to 25.5% compared to 2011 and over 41% compared to 2009, while the Catholic Church received up to €11 billion in the 2012 budget.
• The document identifies a missed opportunity in the energy sector, noting that while 100% renewable energy would be possible by 2050, the PP government suppressed financial support for small and medium renewable producers to favour electricity giants like Endesa and Iberdrola.
• The author argues that fiscal consolidation could be achieved by increasing revenues through higher taxes on the wealthy and combating tax evasion, which is estimated to cost over 60 billion euro in lost revenue, with a hidden economy exceeding 20% of GDP.

APA

Gimenez, D. R. M. (2012). Austerity in Spain: a failed ideology. Green European Journal. https://www.greeneuropeanjournal.eu/austerity-in-spain-a-failed-ideology/

Chicago

Gimenez, Delfina Rossi, Marc. Austerity in Spain: a failed ideology. Green European Journal, 2012. https://www.greeneuropeanjournal.eu/austerity-in-spain-a-failed-ideology/.

Wikipedia

{{cite report |last1=Gimenez |first1=Delfina Rossi, Marc |title=Austerity in Spain: a failed ideology |publisher=Green European Journal |date=1 May 2012 |url=https://www.greeneuropeanjournal.eu/austerity-in-spain-a-failed-ideology/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{gimenez2012austerity, author = {Gimenez, Delfina Rossi, Marc}, title = {{Austerity in Spain: a failed ideology}}, institution = {Green European Journal}, year = {2012}, month = may, url = {https://www.greeneuropeanjournal.eu/austerity-in-spain-a-failed-ideology/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }