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(en) WSM.ie: May 15th - a Peripheral Conversation about the crisis & the EU periphery I. (1/2)

Date Wed, 14 Dec 2011 09:05:31 +0200

This conversation between anarchists from the so-called “peripherals” in the Eurozone, Portugal, Ireland, and Spain took place by timely coincidence on the very day that saw the birth of the Spanish M15 movement. This spread for a period around the globe and was to some degree a precursor or pattern for the “Occupy Everywhere” movement which emerged later this year. On a historical point of interest, in this conversation we also look at the precursor to the M15 movement, the March 12th mass demonstrations in Portugal called by the Geração À Rasca movement. ---- The discussion took place on the Sunday after the 2011 Dublin Anarchist Bookfair, at which the speakers gave a presentation on the conditions of thir countries. Unfortunately our Greek comrade was not able to stay for the Sunday, so the participants in this talk were, in order of appearance - Paul Bowman (PB) of the Workers Solidarity Movement (Ireland), Manuel Baptista (MB) a veteran anarchist from Lisbon, Portugal, and Manu Garcia (MG) from Seville, Spain.

This talk lies somewhere between an interview and a dialogue and the two main speakers both have English as a second language. The decision in the transcription was to stick as closely as possible to the words spoken without attempting to second-guess what the speaker “really meant to say” to avoid misrepresenting the speaker’s views and so readers with some ability in Spanish or Portuguese may better deduce what the concepts or phrase the speaker is, in some cases, struggling to put into English. The resulting text, by staying close to the spoken word, is inevitably a little messy or chaotic in places (transcription of passages where more than one person is speaking at once is problematic) but hopefully it will not obstruct appreciation or comprehension too much.

May 15 2011, a kitchen in North Dublin

PB: So, I guess, I mean, to start somewhere, in the English.. talking about the general language used in the media, newspaper, TV etc, in the English language media, the Eurozone debt crisis, and this idea of the peripheral countries started to appear about a year and a half ago etc when, with the first problems with Greece started to appear. So, has that language, those ideas, of the peripheral countries in the Eurozone, has that appeared in Spanish language media and Portuguese language media?

MB: Me first? Well, yes indeed, and they, as media linked to corporate interests, they tried to induce people in believing that there, it's just like a natural catastrophe, something that was inevitable, and that we had the past that was long ago designed, and we had now the consequences of this overspending and all this consequences. This, of course, we know that, we know and, but we can not counteract at the same level this garbage, this pseudo-information with more serious analysis and showing that we were pushed by the speculators and by financial piracy, I say, to this situation. We are pushed with the accomplice of the state and government but it was not, for sure, the consequence of overspending in social programmes et cetera.

MG: In Spain, the most of the media are controlled by the hard, hard-line right. So, the most of them are centering in the effects of the crisis in Spain. And they are using the Zapatero government as.. goatscape, goatscape?

MB: Scapegoat.

MG: Scapegoat. So they are saying that it has been the so-called 'socialist reforms' that, that have driven the country to the crisis. So they are, they are trying to...

PB: So they are separating the discourse from any idea of a.. of an international or European-level thing.

MG: Yes. They present the aspects of the international crisis, but they try to separate it from the Spanish case. They always try to focus on the Spanish crisis, saying that, in our country, the crisis is very extreme and different from the crisis in another, another capitalist countries.

PB: Right, OK. So they're trying to blame the government and..

MG: Yes, yes.

PB: Playing down other factors.

MG: Nobody, nobody talks about the, the...

MB: In a sense, also, in Portuguese media, but they, they try, they were being pushed, the, these right-wing journalists and interests, they, they were pushed to support a sort of a wide coalition solution that was imposed by IMF, the ECB, and, eh...

MG: European Commission

MB: We call the troika.

PB: The troika, yeah, yeah. That's the same here.

MB: That was - by you also?

PB: Oh yeah, the same, exactly the same. And, and in, in the English language media they come up with this acronym, this PIGS, like, I don't know if you've heard this - Portugal, Ireland, Greece, Spain. So they call us the PIGS, cos of course it's a funny, it's, in English it's a funny joke.

MB: Ah yes, acronym. Like, the Greek, Greek...

MG: Or the PIIGS, with Italy.

PB: With Italy as well, yeah. I mean, but is there, so, what I'm saying is that there's an awareness in English, or, there's this idea within the English language media, that the peripherals, Portugal, Ireland, Greece, Spain, are kind of a set, if you like. Is, is there an awareness in Portugal that there's a, there's a connection with Greece, Spain, and Ireland?

MB: The, yes, the, the prime minister, along the last 2010 trimester -

PB: Socrates?

MB: Socrates, was all the time saying "No, we have a different situation from Spain and from Ireland and it's a different case, our economy and our finance system is much more solid and there is no reason for asking for IMF" repeatedly, but just, just propaganda, I think, because the, the real politics is made no longer at national level, but the, the, so, what is politics in Portugal nowadays? It's just to fool the electorate, to make them believe that there is some degree of national autonomy when there is none. When they have no, no power, they just have to yield to the, to the superpower that are this, embodied by this troika and what they, they try is to show that the, that the politics matters, that politicians can, can make a difference, but...

MG: In Spain...

PB: But in this, in this there is a difference though, between Greece, Ireland, and Portugal on the one hand, because we are all less than five percent of the European zone population, we're all very small economies, and of course Spain is different, because you are much bigger, you're the fourth largest economy in the Eurozone etc. So, it's, a question of scale becomes a question of a difference in quality.

MG: Yes it's a question of scale that is, that is why the big European trains, locomotoras, I don’t know, trains?

MB: Train machines. [i.e. “big engines”]

MG: Train machines, France and Greece are putting much effort to convince the Zapatero government to doing preventive reforms.

MB: Sorry, sorry? Preventing reforms?

MG: Preventive, preventive reforms.

MB: Ah yeah. So before they come in it's better that they do the...

MG:Yes, yes.

PB: So, the same austerity packages that has been forced on Greece, Ireland, Portugal -

MG: Yes.

MB: But this was made in Portugal, because...

MG: Yes, yes, of course. Th- Zapatero is doing it without...

MB: The Portuguese, eh, you go the same path as Portugal because the, they made Pact 1, Pact 2, Pact 3

MG: And four.

PB: Four different...

MB: And the fourth was, was.. how do you say, not passed in the.. eh, because there was a minority, minority government, and the right wing decided to overthrow the government, but now they are going to put in practice these measures that they voted against and even surpass.

MG: In Spain, Zapatero government, from the start of the debt crisis, told the public opinion that Spain was different, Spain was not Greece. Then, Spain is not Ireland.

PB: In Ireland also they said, "Ireland is not Greece." [laughs]

MB: In Portugal too.

MG: Then, Spain is not Ireland. Then, Spain is not Portugal. But now -

PB: It's getting closer.

MG: Yes, it's getting closer. Everyone, everyone knows that Spain is next.

MB: Spain is Spain.

MG: But the problem is, that Zapatero has a strong support for the, for the reforms but not for the government, but as for the reforms. I don't know if I'm explaining. The main party in the opposition in Spain, Popular Party, is the right wing, and they are always threaten to expel Zapatero, and they critique the measures, but they critique the superficial of the measures. They agree with the core of the measures. So the problem is that the public opinion only has access to one version of the crisis. Zapatero is saying the crisis is a European thing, you cannot, and a, and an international crisis, you cannot, er.. culpa? [PB: blame.] ..blame us. You cannot blame us. We are, we are, we are innocent. And the, the Popular Party is saying the, the opposite - "You are the only, the...” [PB: cause of?] Yes, yes. The only guilty.

MB: It's like Portugal. The same game, eh-

MG: The same game, the same game, what's?

MB: The same superficial things, and that, that...

MG: Yes, was a problem for us, in the left. So, we have to, to be clearly in, there is a problem of the system itself, and we are not clear in that. Even the social democratic left is losing their points of view. A time to confront the crisis. Only a small number of people talk about, for example, the model, about, eh.. it was construct, the European Union, and European Union, at the.. shaped for the interest of the financial powers of Germany, above all, and nobody, nobody talks about, or only small, small groups talk about. Only small groups talk about a real alternative for the Spanish economy in front of the.. the crisis. Hmm. So, I think, it's a, it's a real problem for the left too, being so, so lost in this deep crisis of capitalism.

PB: I think with this...

MB: Yes, the, in Portugal, the left, the electoral left, the left to the Socialist Party [of Portugal], which is not left in my concept, because they, they have a long, long history of enforcing the most neoliberal policies that Portugal has ever met. And, the, the, this reformist left is not, is not able to combat, and even in electoral terms it is very weak. Ah, say, even according to, to, what would be expected, they should have a more firm stance, and eh, but they, they have the old-time reflex that when you come to election, you dilute your, your points of view, you don't above all, you don't want to look as radical, as extremist, because it will, it will, eh.. make? [PB: Alienate] Alienate the, the centrist vote, and eh, so, so what they expect is to, to have a shift from people that used to vote Socialist Party, so that they will vote Bloco de Esquerda or Communist Party, and so, this, the electoral campaign is just a fool's game, as ever, but also in this dramatic situation, people have no clues to understand the situation because it's not in these left wing parties' aims and policies to give the, the.. [PB: Radical analysis?] ...keys, the keys for the understanding. And this is very clear, they, they want a chunk of power, they don't aim for all power, no. They don't aim for grabbing the power because they know they can't, they couldn't, never. So they, they try, a chunk of power, they try, for instance, that the Socialist Party becomes too weak, and, but the right is not strong enough to, to form a government in this case.. [MG: Make a pact.] They.. force a government, because for them, it's.. this is the, the focus of all the fights.

PB: Little, little steps to power.

MB: It's not the class struggle. It's not the class struggle, it's to win electors, and the class struggle can be something that they say they, they are committed to or... that is... And, eh, you see this because when the elector-, the, their, their membership, the grassroots, they are in unions, and they make nothing to push or to sustain ongoing struggles. If there are shopfloor struggles, these are, these are moments of, of peace, of social peace, because they have instructions not to, to arise and to put forward any situation...

PB: Radical demands, or...

MB: So that can be... All the energies are focused on electoral issues. And, I think it's very empty pedagogy, is very bad the role that the unions play, the so-called left-wing union is something CGT-P, and it's left to the UGT but only in the sense, only in the sense that it is controlled by left-wing people. But, in fact, they are just like the others, and they make the same kind of, of attitude, because they participate in, you know in this, called the convers.. Permanent Conversation Board, I don't know it.

MG: Social pact.

PB: Social partnership?

MG: Social partnership.

MB: It has another name, but it's the same concept...

PB: The same concept, yeah.

MB: And they both participate in TU, TUC, trade union con.. European...

PB: Oh, the European Trade Union Congress.

MG: Yes.

MB: So they are members, both members, and many policies and subsidies come from there, and so, the...

PB: A similar situation to in Spain where you have the UGT and the CCOO...?

MG: Yes

PB: Two Federations but in practice...

MG: Yes, they are two federations but really, in fact, there are not many differences between them. They have a strong unity of action since many years ago. That unity of action it’s not against the cuts but for the social partnership. They are always the... interlocutor? the necessary interlocutor for the government to sign the pacts for the social peace. So they sometimes have to confront the government to show them that they control the workers and they have the power (of the workers to back them).

MB: Same in Portugal.

PB: It’s a bargaining position

MG: Yes a bargaining position, and because the bosses press them to do something. But then they, first they convoke a demonstrate, first, and second, they sign. It’s always the same.

PB: [laughs] We have a very similar pattern here

MB: Like in Portugal, it’s the same.

MG: What is important in Spain is there is a combative syndicalism. Some of them were fighting inside above all commissiones obreras since some years ago but in later years they have started to create alternatives, they have joined the CGT or CNT or independentist unions in the Basque country above all or in Galicia or in Andalucía too. But they have also created another union Commissiones de Bases? Bases committees, like in Italy...

MB: This is a very important difference with regard to Portugal. This alternative union is completely absent. We as anarchists were not aware of how important - collectively aware - it is to have the capacity to directly to work and put our methods... These bureaucrats in both [union] centrals have no alternative model that the workers can look at. But in Spain, in Italy, in France they have.

PB: Yeah. In some ways that’s a kind of discipline on the mainstream unions as there is always that little bit of a threat of an alternative. They might lose legitimacy or credibility.

MG: Yes I think so

MB: It’s easier in these countries (with alternative unions) that the big union leaders could lose face.

MG: In spite of it all I am a partisan of class unity and the union, or the syndicalist unity. But it’s very difficult to achieve this unity inside the commissiones obreras and UGT. By its own nature they are more and more only an apparatus, a vacuum from real force, from real participation of the workers. So it’s very difficult working from inside because easily you are expelled. So more and more people that created in the commissiones obreras, for example, are going out and looking for an alternative. The question, in my point of view, is that all the alternative syndicalism, all the combative syndicalism has a strong need to find points in common. Each syndicalism, each organisation has its own peculiarities and, it’s ok, we have to respect that, but we need to hit together. So I think that is the fight... il desafío? [MB: the challenge] the challenge we have in the combative unions. And I think its, the main task of the real left, the more important task of we, the libertarians, to achieve that real unity in the struggle.

PB: Unity amongst the combative unions?

MG: Yes, unity for fight, unity for action, for... intorno? - around some relevant points in common. Opposition to social partnership, a real social policy, for a real empowerment by the working class.

PB: A big difference from what we are getting from the mainstream trade unions. In Ireland its a very similar story to what you’re saying about Spain.

MB: In Portugal things are getting worse and worse and worse. In 12th March there was a huge demo called by groups of young people that were in precarious jobs or students that were losing their grants, and things like that. It was amazing because these self-organised and anarchistic in spirit people were able to put in the street not only their generation but all kinds of generations. Sometimes there is a spark that happens. In this case it was a song by a pop group that said “How stupid I am, I am studying for being a slave”. This has a strong echo in the young people who say “Yes we are being described by this song”. It was labelled A Rasca generation. The generation that is living on the... you know... A Rasca is to be in a very bad situation, to live with the minimum, I cannot translate it the expression.

MG: Precarity?

MB: More or less, but it’s sort of a slang phrase.

MG: Ah! Yes, the name of these people is Geração À Rasca In Spain there is a similar movement called Juventud Sin Futuro “Youth without future”

MB: Ya, it’s the same.

MG: It’s the same movement.

MB: The media, controlled by the interests, mocked it, defamed it beforehand. Because they didn’t believe things like Twitter and Facebook were enough.

MB: It’s true. They didn’t see any commitment of left-wing parties or so-called left-wing unions in this. And it wasn’t expected that a hundred of thousands of people turned up in Lisbon, eighty thousand in Oporto and a few thousand in various cities. And when they saw this, immediately they saw that as they could not minimise this movement, they tried to speak for them. And the parties and left reformist parties they tried to, how do you say, to “Shanghai” the people into their electoral circus. That is very bad politics.

PB: You were saying also that in the run up to the March 12th demo the mainstream unions decided to call a demo the week after.

MB: Yes, beforehand they imagined, as they are very self-sufficient, they are very proud of themselves, they said well, this will be a flop. So we are smart and we going to call a union demo one week later. This union [demo] was [in] a unique place. It was with union money and they hired buses to bring people in from all over. Even though, it was much smaller and mainly people of a certain age. It was nothing. And the problem is, we need in the short term, we cannot build alternative unions in one step. But we can however enter, massively the existing bureaucratic unions, because there is no alternative like in Spain. And there force these unions to behave like unions. And this is possible if there is a massive entrance of people who know what they are doing inside of them. But it’s very difficult because people that say “Oh, no, the bureaucrats have given such a bad name to the unions that most young people will refuse this.”

PB: Can I just come back to Manu you were talking about in Spain this Juventud Sin Futuro. Is that a similar kind of phenomenon?

MG: Yes, its the same, the same phenomenon. It’s a phenomenon that is born from the university youth, not from the workers youth. And the problem is the left is trapped in electoral tactics as Manu has said about Portugal, and is unable to capitalise on this movement and attract them to left positions and class struggle positions. This movement, I have no illusions but I don’t want to be over pessimistic. But, by now it’s an inter-classist phenomenon. But is interesting because every analyst, every... opinolog... opinion maker, spin doctor, all of them were saying since ten years ago that our generation was a very capitalist generation. What is happening now in Spain, in Spain most of the youth still shares in capitalism. But capitalism has...

MB: What do you mean?

MB: They rely on, or have confidence in it. Capitalism has betrayed them. They have capitalist aspirations but the system cannot provide them the goods and services that they want. So, now is the moment for a politicisation, real politicisation of the people. Now is the moment where we can present our socialist program for the people, saying capitalism has failed and that there is an alternative and it is libertarian socialism.

PB: It’s interesting in, we have a similar phenomena in Britain, and in Ireland, the demonstrations that have been most confrontational, are in fact the ones from the students, from the youth, against the student cuts, and so on, but which turned into larger, more generic confrontations with, you know, they attacked the Tory party HQ in London, they fought with the police and so on, and again its the same thing that there was, from the 1980s through the 1990s, there was this idea that students were becoming less political, that they were children of Thatcher, that all they were thinking of was getting a good job after they finish their studies, [MB: It’s the same everywhere] so they would put up with shit, precarious jobs while they were students, because they didn’t imagine themselves to be workers, they imagined themselves that in 20 years time they were going to be a doctor or a solicitor of something like this. And, like you say, now all of a sudden, the ability of the system to maintain that illusion has disappeared, because they realise that there’s not going to be anything more than the shitty, precarious jobs

MB: I don’t agree all, because many people that were in this demo, they were long ago suffering the situation of the most precarious workers class and, jobs and having precarious lives and subject, for sure they are very cultivated, even if they have capitalist-minded education, you must not forget that there are many, many ways, many channels that they can drink from other waters, other sources, and it’s really clear that by the slogans and by the, how d’you call, they wrote posters, interesting posters, there are collections of pictures, I can send the links for that, where there are these things they express, show that they have no illusions about capitalism. The problem is, we don’t have a clear way out of this mess that is being done at, in our countries, and this is, in my view, the problem is this. Is because we have, we cannot rely on a party, there is no party that is reliable in any how. The anarchists are defamed, are demonised, and so people are afraid to approach anarchist organisations or anarchist er... because they have demonised image in the media. And sometimes the radical left, and even the libertarian left, is self-defeating in er... with ultra-sectarian behaviour, even among them, between the tendencies. And the result is that someone who looks from the outside, says “no, I won’t mix with these guys”

MG: Yes its our proposal and our... our organisations are not attractive because... many things. So I think there is a real drama, the people is starting to awakening, they are seeing that capitalism is in crisis, that capitalism cannot provide any more, or at least in this moment, the goods and services that capitalism has promised them. It has, capitalism, that has broken the social pact. OK, not the workers, not the youth, it has been capitalism. What is the problem? Now the people is starting to fight, the people is mobilised, the people is awakening to politics. What is the problem - is that we are not, right now, in conditions to capitalise that discontent. That is the problem. That is the real problem. The real problem, not only in Spain but in Portugal, Ireland, in Greece, even in Greece. And this vacuum is being filled by reactionary forces.

MB: Which forces?

MG: Which forces? I’m talking about the far-right...

MB: Ah, the far-right.

MG: Yes, I’m not talking about the left, as you have described in Portugal, is lost. They don’t know how to do. If go to elections, support the mobilisations... they don’t know what is the language that they have to use with the people...

MB: But even they don’t have strategic aim. [MG: Yes!] A strategic aim must be, even in a party, must be beyond the next election.

MG: I am talking of the majority of the left. There are sectors that are talking of things like we are talking now. But we are a minority, by the moment, and the time is running against us. I don’t want to be pessimistic, but we have work to do...

PB: I think still that there is an opportunity for our kind of politics there, if you like, which is this. The weakness of the conventional left, is their electoralism blinds them. It creates a discourse where the politics is vertical. That the national working class in Spain, in Portugal, Ireland, must fight the government of the state, as if somehow changing the government would change the situation. Now from out point of view, because wee are free of the drivers, the pressures of the electoral game, we can look and we can go, ok, no, this is a problem of European constitution, and we can look outwards, horizontally, rather than simply vertically. And we say, ok...

MB: You mean the European constitution at large, say...

PB: The composition, not the constitution in terms of a document, but the capitalist composition [MG: the process of...] [MB: the frame] the frame of Europe. So, for example, students in Ireland were aware of students in Britain rioting, but they’re not aware of the May 12th demo, or in Spain etc. So simply by communicating to...

MB: March 12th.

PB: March 12th, beg your pardon. Simply by communicating to, like youth here, like we have people in organisations, radical student organisations, can say look, we are not alone its happening in UK, its happening in Barcelona, Madrid and Seville and so on, and to make a reality of this idea of the circulation of the struggles, in order to broaden the perspective, so that it’s not simply an Irish problem, it’s not simply a Spanish problem, a Portuguese problem...

MB: The problem is that we have not found yet found a... we too, we have to be self-critical sometimes, we didn’t find a strategical way out. in terms of a... so, I can put forward some hypothetical things, just for thought. That we should voice, in a loud voice, the idea of a social class struggle front. A social front of all the people that are exploited, and we are 95% of the population, would have reasons to fight - at least 95% - have true reasons to fight against this. This is one thing. The other thing is to find weapons, weapons that are appropriate to make them feel that we can counteract, not in a symbolic way - because what I fear the most, is that we exhaust ourselves in demos, in all kind of symbolic things, that are necessary to a point, but it’s not this the core of the fight.

PB: And in Ireland, actually, these demonstrations are used by the mainstream unions to dissipate energy.

MB: Exactly. To dissipate energy. Its the pressure valve. The safety valve. What I would like to see is that on one hand we have people that enter unions, because unions, it’s a class, it’s worker’s class... [MG: organisation?] come se dise - patrimonio [PB: heritage?] - patrimoine - it’s not heritage, it’s a different... belonging. Belonging, its workers class collective belonging [possession], and its doesn’t belong to the bureaucrats. They are using our money, they are using money of our fathers and forefathers, the sacrifice of many people, workers that for many generations built these unions. So its abuse. So we should make clear that we are going to take it back to where it belongs, it belongs to the workers class. To make occupations, but not occupations of abandoned houses, but occupations of unions. Occupy them, in a pacific sense, not in the sense of destroy, no, its to give them back their primeval reason. Why this? Because they have accumulated things that they, there are many things that its very important. Otherwise if you have to build a brand new union from scratch, its impossible. Or you will have a tiny little union that will have no power of bargaining, and if it has no power of bargaining it will not be taken seriously, even by workers, and even by committed workers. So this is a strategical move from the anarchists, and we have to look back to the beginning of the 20th century, it was exactly the same situation. The anarchists, but not the same, because the anarchists realised they were being self-defeated by this terrorist approach, and they changed in the end of the 19th century and the revolutionary syndicalism is born from this change. It was very fruitful change, it make most of the unions we have nowadays were built up by this extraordinary movement. So we can say, well now its not the beginning of the 20th century, but it is somewhat similar in a sense that we have this instrument and we can invest in them as organised as anarchist tendency as libertarian, socialist libertarians, as syndicalist tendencies and we don’t have to have, we don’t have to be clandestine, its our patrimonio. Its our patrimonio, we have to right to be there. And this is one move. The other move is to make campaigns of divestment against corporate capitalism. Not that we will make a victory or something, but if we make boycott campaigns against Israel, if we call for withdraw the troops from Afghanistan, etc, etc, why not making a divestment campaign from the corporate banking that is responsible for all this crisis. The direct responsibility is not the small capitalist. The direct responsibility is this big bankings that are using and have used our money, the money of pension funds, etc, etc, for speculation, and want to go on and want the state to give them money, and the loans at very good, er...

PB: I am going to interrupt a little bit there because I want to steer the conversation onto banks precisely, so I am glad you brought that up. I don’t know if you are aware but in Ireland a big part of our crisis has been related to the banks and the banking system. So I would be interested to hear, in both of your countries, what role the banks played in the crisis in 2008 and until now. I believe in Portugal it is a similar story so maybe Manu I will start with you.

MG: In Spain the crisis has been, above all, a financial crisis but the banks have been solid, until now. But at what price! The government, at the first moments of the crisis, only a few weeks after the US did the same, gave many million euros to the banks.

PB: By banks, do you mean the big national banks and the Caixas as well?

MG: Yes, yes, to the whole financial system thinking that they could revive the financial system and the credit, but in the end it has not been that. The credit is still at the lowest levels, and its affecting so much the economy. The government, from the first moments of the crisis, started a plan called FROB. That plan was aimed to restructure the internal savings of the banks, some of them buying the toxic assets, changing the function and privatising the Caixas

PB: Were they like mutual banks, where everyone can deposit, like building societies?

MG: Yes, it is a mixed figure, social and private, with a supposed social aim

PB: So now they are trying to privatise those banks

MB: Just a point, I think the Spanish situation has something peculiar, that is the fact there was a heavy investment, and also popular investment, in real estate. And the banks were heavily conducting this and the people were borrowing money to buy property, to buy flats.

PB: This is the same as in Ireland - but not so much in Portugal I believe?

MB: I think it is much as in Portugal, with a slight difference because in Portugal, the banking system has, since long ago, had this inflation in prices. What happens is that they are interested in supporting this market and because why? Because the banking system derives a big part of its profit from the credit to buying flats. And what happens is, mainly to families, and also to the enterprises that many of them are directed towards the construction, so it is two ways. At the same time, what happens is, you have to see Portugal as a country that had the big influx from emigrants money that came and now many houses. We have 10 million population…

PB: Sorry, is that Portuguese people who have left to go and work in other countries and then send money back?

MB: Yes, because it was a country of emigration. What they did, these emigrants, was to buy houses, sometimes for their sons, or for themselves, sometimes as a placement.. [PB: As a pension?] and they are, the estimation is, 350,000 to 400,000 houses, it is not very clear, and we have.. these houses are empty, many are never used, others have excellent conditions. To be rented or put on the sales market. And these 350,000 houses, they, of course, because they are there, and some, probably many, would like to sell them, how come this doesn’t make the prices go down? Because the economy is directed by banks, it is the banking system that is directing everything and making, sustaining this artificial thing. It has nothing to do with the supposed automatic connection of offer and demand, because you have a big excess of offer and you don’t have the lowering of prices.

MG: In Spain is the same

MB: In Spain you have the lowering of this price, very significant lowering. If you compare the real estate lowering in Spain is very abrupt. There is a big lowering in real estate and in Portugal there is lowering but somewhat…

MG: In prices?

MB: Yes

MG: It is not as pronounced, the prices still are high

PB: In Ireland now, we are 40% down so there has been a relatively large decline

MG: In Spain it has been very very (soundslike?) slowly

MB: I thought it was about 30% in Spain, I heard 30%

MG: But they are not at the real levels

MB: Value? It didn’t reach the bottom?

MG: Because the only people that now is selling houses are the people that really need it. Why? Because most of the people has done a very high investment in these houses so until they can recover, or at least.. [MB: They have hopes] Yes, still they have hopes and they have no urgency of selling. There is a sector that, there is one sector, other sectors are totally different because the banks are on backs of the people giving the money, giving the money, the mortgage so, in Spain, if you lose your house, with the bank you should still pay your mortgage.

PB: Even though they take the house, you still owe the money

MG: Yea

PB: It is the same in Britain and Ireland

MG: So that people is desperate, pressured to sell the house but the other people didn’t want to sell.

MB: In Portugal, what happens is similar but, in my view, there is another thing, we have a salary level that is significantly lower that the Spanish and this means that, you know, the mean salary is €700 a month and the minimal salary is €450 a month, something like that, not even €500. And what happens is, in Portugal, there is a high percentage of families that own their homes outright and this is not normal.

MG: In Spain the same

MB: Because, there was, I think there was, the explanation is simple, there was a period where Portuguese families saw an increase in their economical capacity, in the nineties. They were able to go to the banks and ask for a loan.. [MG: And it was very easy money] ..mortgage, and they thought it was feasible to become an owner-occupier. There are many that have paid for 5/10 years or something like that but they need to pay for twenty years or so to the banks.

MG: 30 years in Spain

MB: And here in Portugal it is the same. This situation put the population under, how do you call, blackmailing?

PB: Yes

MB: Because banks use this situation and they can change the mortgage rates, the spread and all this stuff and so the people, they feel powerless

MG: Now in Spain the banks has passed to be banks giving credit to be real estate owners

MB: Like in Portugal

PB: They are landlords

MB: Landlords and real estate owners

MG: There is an increasing concentration too of the richest

MB: The biggest real estate, lets say firm?

PB: Intermediaries? If you want to buy and sell your house you go to them?

MB: Yes, how do you call them?

PB: Yes, real estate firms

MB: The biggest one in Portugal has, lets say, a number of flats and properties that result from these mortgages. So the banks give to these..

PB: Estate agents

MB: … intermediaries something new, I never heard that

PB: We have an interesting situation here, in that the, I think what you were saying about the fruit, we have something called NAMA which is the National Asset Management Agency. It has taken the bad loans from the banks to try and make the banks, and has nationalised it so effectively now there are now…
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