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Greece, Spain Deeply Uncertain About Economic Futures

May 23, 2012 at 12:00 AM EST
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GWEN IFILL: European leaders gathered in Brussels today, as the eurozone’s economic woes worsened, and they braced for the possibility that Greece will drop the euro. One of the most vulnerable E.U. nations is Spain, sliding from recession into depression as its banks teeter on the brink of collapse.

We have two reports from Independent Television News, beginning with Lindsey Hilsum in Spain.

LINDSEY HILSUM: On the streets of Madrid, they have a message for the leaders meeting in Brussels: Stop cutting and start promoting growth.

For them, the Spanish government’s decision to recapitalize Bankia, the country’s fourth largest lender, while reducing education spending by 20 percent, was the last straw.

Students and teachers are just the latest people to come out on strike in Spain. They say the government shouldn’t be bailing out the banks while it’s cutting education, because that will destroy the future of the country.

WOMAN: We have fought very hard for many, many years just to lose things just like that, just because of the government, just because of Europe, just because of the European bank. We don’t like that.

LINDSEY HILSUM: With youth unemployment nearing 50 percent, students see no future in Spain.

So where will you go?

MAN: I don’t know, Latin America somewhere, Brazil, Mexico, somewhere where it’s going up, you know?

LINDSEY HILSUM: The leaning towers of Bankia dominate the Madrid skyline, but it’s unlikely to be the only Spanish bank needing a bailout.

No one here’s expecting a miracle from God, but many Spaniards would like a word with the Germans, whom they blame for forcing their government to persist with austerity measures.

IRENE LOZANA DOMINGO, Spain: Also, Germany has got a lot of profits from the euro. Because Spain was rich, we bought many things that were made in Germany. So if we go — we are all linked. So, if we go to hell, they are coming with us.

LINDSEY HILSUM: The new town of Valdeluz, just north of Madrid, was built at the time of Spain’s property boom. But then came the bust. Now it’s one of a dozen ghost towns.

This was the Spanish dream, new developments, luxury apartments, the good life. But it was all on borrowed money. Now the developers have lost their investments, the banks are in crisis, and increasing numbers of Spaniards are homeless.

Maria Francisca and Jesus bought their apartment in 2004 when he was earning good money as a builder. But since he lost his job, they can’t pay the mortgage. With their daughter and disabled son, they will soon be out on the street. The bank, once so friendly, now says it will repossess their apartment.

MARIA FRANCISCA CANO MUNOZ, Spain (through translator): At first, they were nice, and said, don’t worry. You can pay at the end of the month to avoid interest. But when you can’t pay at all, suddenly, you’re a bad person and there’s the door. Go.

LINDSEY HILSUM: One family amongst many. Every week, more go to the neighborhood advice center to ask how to avoid falling into poverty. But there are no clear answers. Europe’s leaders may yet save Spain’s banks, but no one is bailing out the victims.

GWEN IFILL: In Greece, the government remains in a state of political limbo, with the country’s finances in turmoil and voters rebelling against E.U.-imposed austerity measures.

Jonathan Rugman of Independent Television News reports from the Greek town of Lavrio.

JONATHAN RUGMAN: Littering the hills around Lavrio are the silver mines which once financed the golden age of Athens, silver from which the very first drachma coins were cast some 2,500 years ago. The town’s mining industry is long dead now, though the talk in Lavrio of returning to the drachma has only just begun.

Lavrio looks like a fairly typical Greek town entering the high season of summer, but scratch beneath the surface and you find a place deeply uncertain, both about the future and its place within the eurozone.

The harbor is brimming with uncharted charter yachts, tourism becalmed and confined to port in the worst season in 15 years. If the old men linger over a single coffee a lot longer now, well, their pensions have been cut by 30 percent.

As for unemployment, well, it is around 40 percent. And Christos in his early 20s can’t even find a holiday job as a waiter.

CHRISTOS GOTSIS, Greece: No jobs, no money, so no life.

JONATHAN RUGMAN: Who do you blame for this crisis?

CHRISTOS GOTSIS:  Greek government first, and then Germany.

JONATHAN RUGMAN: German-engineered austerity is blamed for this, too, the holiday homes abandoned and unfinished since financial boom turned to bust.

By a tumbledown shack, his family is too ashamed to let us enter. We find Giorgos, who lives here with his wife and five children. His electricity has been threatened, and three days ago his water was cut off, until the local Communist Party intervened, and he wants Europe to put an end to Greece’s pain.

GIORGOS SIDIROPOULOS, Greece (through translator): I would just ask Europe to help poor people, to help them find work, and stop trying to take money away from people who don’t have any.

JONATHAN RUGMAN: All over Lavrio are signs of support for the Syriza Party, radical leftists who campaign against austerity and who’ve polled more votes here than anyone else.

Athanasia Markouli will be voting for them again next month, because, she says, Greeks can no longer drink German’s economic mix. As for the Eurozone pushing Greece out, well, they wouldn’t dare.

ATHANASIA MARKOULI, Greece: They need us.

JONATHAN RUGMAN: Otherwise, what?

ATHANASIA MARKOULI: Otherwise, nothing. There be a problem. It’s the whole of Europe.

JONATHAN RUGMAN: So you’re in a powerful position to negotiate?

ATHANASIA MARKOULI: I think so. I think so.

JONATHAN RUGMAN: Lavrio seems caught between a rock and a hard place. Nobody we met wants to leave the euro, yet nobody accepts the Eurozone’s austerity either. And choosing between the two, well, that’s not a choice anyone wants to make.

GWEN IFILL: Europe’s main stock indexes plunged more than 2 percent today, as the euro fell to its lowest point in nearly two years.