Tags
Andalusia, Corporate State, ERE, Fraud, PSOE, Scandal, Spain, Spanish Politics
In Spain, if you work for a Trade Union, a Party, or for a state foundation, (The Corporate Statre), you can recieve anything. From luxury cars, driver, laptop, etc, to endless hours at work, a meager salary, and all kind of unexpected, disgusting, and somehow illegal surprises. “This do not -only- depends on your connections dear Joe, but, taking into account the prevailing chaos, of pure luck”. Sometimes this ‘unfair’ situation is recognized and rewarded….
Now, different but related, when you want to fire someone you have to pay a fixed amount. If you have ‘real’ problems and you make a mass redundancy, you have to pay less. The government is the one that go throughh your balance sheet and guarantees The Unions that you are not lying. After that, a agreement can be forged. Finally, there was a subsidy in Andalusia for companies with big problems, to make the redundancy easier anf guarante its survival. That´s the THEORY. Now, how did it really go? You are in trouble and you go to a lawyer to do all the paperwork. The very lawyer or the Union guys will tell you that he can’t help you. That you must go to This ot That buffete. Once there, you pay their fee and an extra of 12.000 euros in cash or, if you do not usually work underground, through bank for a false service: Say, you suddenly need to review your factory sewage. The buffete will give you the bill on behalf of the other company. After that you go to one Union (CCOO) and you pay 6.000 euros. You go to anothe Union (UGT) and you pay 6.000. Your (new) lawyer will tell you who must receive this. Now you have your agreement with the Workers Unions. They will “convince” the workers and also, by several rules that protect the Unions, the agreement it´s almost mandatory for your workers. Now, on the track again, you present the agreement to the government, and its (always) approved. You recieve a letter that say you so, and a list of the workers affected. Surprise! There are 8 guys yo do not know. Your -connected- lawyer and the state owned charity ( IDEA Foundation) that gives the subsidy tell you that they will pay for the extra 8. That they belong to other companies too small to qualify for the subsidy. The subsidy means that they will pay for you to an insurance company that pays your workers + 8. You pay a bit, but far less than you ought to. Suddenly the government stop paying to the insurer. The insurer to the workers. And the workers come to visit you. No answer from your ex (connected) lawyer. The insurance company sues you for all your workers payments (no mention about other companies and the extra 8). You watch the news and the talk about scandal, fraud… you find out that the extra-8 are politicans of the ruling party (PSOE) or unionists. One of them has been in your company since the day he (the politician, a former minister) was born.
Asked by media, our Joe, do you remember him? the poorly paid Unionist? He is in its 45s and he declares that he new that it was extrange to get a life pay, from the State, for servicies in a company he had never worked for… but that he had started working for the Union very young, in the hard days of the dictatorship, that his salary has always been scarce, and that this a a compensation for all his efforts for the public interes. And I believe, that he believes…
Finally, while the trial starts, the insurance company claims deter credit, and your company closes. All the workers are fired. No one of them receives a golden-parachute, and the ones that had it before, do not have their monthly checks. Nice end for the Andalusian economy.
PS: I have been unable to find Joe´s real name. But the politician that started working in his first day of life is Antonio Fernandez García, ex-regional minister of Employment.
Ps2: If you want to know what´s the problem of which this is the sympthom, read “Fixing the crisis in Spain: History rules…” http:/wp.me/p2KoGX-4
It’s possible for a reader outside Spain can’t believe that this actually happens. But it’s true.
In short, the law provides a complex, slow and bureaucratic procedure for collective dismissals in enterprises with serious financial problems. However, if you pay a bribe (for Unions and for someone else to you can’t know, but you can imagine that he’s a member of the regional government or the Administration), the problem is over. The dossier will be approved immediately, without having to provide any document, and even if your company doesn’t comply with any of the legal requirements.
An important part of the problem, however, is the extreme rigidity of the Spanish labor market, which remains almost unchanged since the time of Franco (a law with a significant burden of fascist ideology).
The system is so complicated and so dependent on the goverment (in fact, the regional goverment) that causes this type of corruption. For enterprises, the choice is clear: either pay the bribe and everything is fine (in fact, better than keeping the law) or don’t pay and the Administration will block all, with or without reason.
Of course, all this does nothing to dispel the myth that the Spanish work shortly. This gentleman, the famous former regional minister, officially worked at the company since the day he was born … A hard worker …
I write as one of the foreigners who have been trying to understand Spain – in my case for a decade. I knew something of the absurd privileges of functionarios and the the close relations that exist between the political class and the numerous public companies , but was never able to acquire any details. The lack of any transparency in public administration , the docile local press and an impenetrable legal system were always barriers to understanding.
Your articles are the only ones that I have read that open a window into the corporate state that exists in Spain.
But I wonder if you are a lone voice. Where are the Spanish politicians calling for reform? Who proposes an end to the present system? If , as it seems to me, no one is talking about serious reform , then the future looks very bleak indeed.
Thank you for your comment, I am really happy to read that, although I do not know if it is aimed to me or to Miguel Angel
It would be really interesting to know what kind of situations have shocked you.
Last week´s journal “Capital” includes an interview to R.Vaughan where he says something like “Spain is the parody of a country”. It´s really funny, and interesting, and also sad.
Well, I must warn you that I am a “funcionario” so my opinions could be biased by the desire to maintain my job.
This said, I think politicians in Spain can´t be a source of change because, if they belong to the strongest parties, they live from the budget and a deep reform goes straight against their interests. They are like “funcionarios” but without any entry exam, more pay (eventually), and fewer controls.
The main parties work like sects. They say they are open to society but they live to praise Good (the state money) and, as Its Gifts are not unlimited, they do nothing to share them. The promotion policy is based on the time you spend there, so unemployed, relatives, youngs that struggle to pass a exam because they spend more time serving The Party than studying… they are the ones that promote.
And politicians from the little parties, simply get no power.
I think that small as it can be, our main hope is citizens making the administration reform a trending topic (first of all, the rules about Political Parties Finances and internal democracy), and foreign imposed bail-out conditions.
And right now we could have an extra shot. The Pp has got more power that it can digest. Making now a reform to reduce subsidies to all the political parties, unions, power-friendly-companies… would be a master strike against PSOE and that would mean that, at least, we would have our problems reduced by almost a half.
Finally, there are voices inside the “funcionarios” for change, but most of them (All of them?) shiver at my proposals because they dream that there are others to blame for this mess, and that after getting rid of the culprits, we will be able to keep with our business as usual. The meaning of Structural Crisis looks unable to get into Spanish minds.
Which would be the changes in the public administration that I suggest?. I usually sum it up saying: Today, Spain is an anarchic paradise for politicians, and a soviet nightmare for citizens. Tomorrow, it should be a soviet nightmare for politicians, and an anarchic paradise for citizens.
And when I say “politicians” in the last sentence, I mean anyone receiving public funds.
Thanks again.
Currofbm
Thanks for your reply.
You ask what events have made me wonder whether I fully understood the Spanish situation? At a national level I would single out the events around the insolvency of Bankia which seem to me reflect perfectly your analysis of the link between politicians and the Cajas and what this tells us about the “corporate state”. Secondly it was the discovery of the extent of what you call publicly owned “entities”, and how they are almost totally unaccountable.The link you posted in another article was the first time I have seen anything like a comprehensive list.
The event that started my investigations was something that occurred in Leon but which I have since realised has been happening all over Spain. The former Alcalde – a man who to me had seemed incorruptible – was given a massive kickback by the local Caja when he took “early retirement” from the bank , even though he had been a full time politician for 20 years. Up until then I had assumed that the Cajas had been as regular banks. It was a rude awakening.
What your articles suggest to me is that any so called bailout will fail if it does not address the issue of the reform of the public sector and the control of the “entities”. Having read your articles I wonder also, whether the remarkable faith Spanish voters have in the institutions of the European Union is because they have so little faith in their own. Spanish voters seem to believe that only pressure from outside Spain will start the reform process. Something which you seem to back up.
What is refreshing about your articles is you move away from -or avoid – the unanswerable questions of whether Spain is better off without the Euro . If I understand you correctly you are suggesting that without political reform such a question is irrelevant.
You totally nail it.
a few colleagues in trying to make a serious study, but I would bet that this money has been like food given directly to cancer cells. It boost short term growth, of course, but its long term effect is fatal (contractive).
I have seen millions of EU-euros pass and I seriously doubt if, given our current institutions, its long-term effect has been god or bad. I do not have hard data, although I have fooled
Pilling more money in without really-structural reforms is criminal, or pure madness.
I think we can easily see this with Cajas. If you have a bank whose business model has ended in bankruptcy, is it a sensible solution to fire workers, but maintain its management model and give them more -public- money?
And I think that what is good for the Cajas is good for the State, in this case.
Politicians, funcionarios, companies… we all are pieces of this broken management model, so it´s really difficult for us to start a process of change. Who will go first? And who will go, indeed?
Finally, I have complain about the mismanagement of EU funds, but at least the mere presence of the EU forces our politicians to answer at someone, that is a huge progress once you realize that there is no way for them to answer at Spanish citizens. You should see what happen with the management of the non-EU funds (Our own resources).
So, 100% right, staying in the Euro or not is not the main question.
That Catalonia or the Basque Country remained in Spain, shouldn´t be either.
The main one is where are we going if the main company in this country (The State, in general) is managed by a bunch of irresponsible beginners as if it where their own SME – Small Family Business.