Real Madrid vs. Bayern Munich

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In Madrid this past week I've been surprised and impressed to find little resentment towards the European Union and the powers (Germany) that direct its policy. There's less ill feeling, I'd say, than in Ireland, for instance. It's hard for a foreigner to judge on a brief visit, of course, but the mood of the people I've talked to has been one of grim resignation more than anger at Brussels or Berlin.

What makes this all the more odd is that Spain did not bring financial ruin on itself in the way that Greece did. Going into this crisis its budget was in surplus and its public debt was much lower than the EU average. With hindsight, Spanish governments were at fault for failing to lean heavily against surging house prices and private borrowing, for allowing the trade deficit to explode and for letting wage inflation push Spanish unit labor costs so far out of line. But I don't know how many governments elsewhere would have avoided those errors if the same conditions had arisen. The housing boom was fueled by a wall of easy money from abroad--easy to interpret as a vote of confidence in Spain's long-term economic prospects, and a difficult thing to turn back. Also, if the borrowing was excessive and irresponsible, so was the lending. EU creditors are deeply implicated too.

When you consider the severity of the fiscal contraction now under way, the depth and likely duration of the recession, and the fact that the EU has so far been barking instructions rather than helping to cushion the blows, you'd expect more of a backlash. It's not that Spaniards don't understand what's going on. The unemployment rate is 23%; one in two people under 25 is without work. At the beginning of the week Spanish newspapers carried reports of new IMF projections that show Spanish output failing to recover its pre-crash level until 2017. A lost decade, one of the worst outlooks in Europe--and this is assuming no new setbacks. Doesn't Europe owe Spain a little more solidarity than this?

If Spain is slow to complain, it might be because membership of the EU is of surpassing importance to this country. It affirms a new political identity. It underwrites democracy and political modernity--in a way that Central Europeans find easy to understand, and Spain's fellow Western Europeans don't. It means there's a deep reservoir of goodwill towards EU institutions and a determination to make a success of the EU project. All the more reason, I'd say, why Spain's EU partners should do more to help it out.

ECB president Mario Draghi told the EU parliament today that Spain had made remarkable progress on fiscal policy. Effort, yes. Progress? That's debatable. The fiscal contraction is far tougher than it needs to be. With EU support, a more moderate pace of adjustment would be feasible. That would be progress. The EU owes Spain more than words of encouragement.

Real Madrid plays Bayern Munich at home tonight in the second leg of the Champions League semi-final. This afternoon I walked down to Plaza Mayor for some lunch and watched the German fans gather at the tables in the square. The mood was friendly and exuberant. Sitting right by me were four of the visitors, their table struggling to accommodate all the food and drink they had ordered. Beer, red wine, white wine, plates of tapas occupying every square inch and teetering on the edges. An elderly Spanish gentleman--not badly dressed, perhaps only recently down on his luck--was moving from table to table with his stool and box of polish offering to shine shoes. One of the visitors courteously availed himself of the service. The madrileno, delighted to have a customer, set to with enthusiasm as the diner leaned back and called for more wine.

I'm hoping Real Madrid does well tonight.

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Clive Crook is a senior editor of The Atlantic and a columnist for Bloomberg View. He was the Washington columnist for the Financial Times, and before that worked at The Economist for more than 20 years, including 11 years as deputy editor. Crook writes about the intersection of politics and economics. More

Crook writes about the intersection of politics and economics.

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