Protests have erupted in Spain in response to the country’s devastatingly poor economy, high unemployment and the government’s draconian austerity measures that affect mostly the middle class.

Dissent among the populace – particularly among young people who are burdened by a jobless rate of about 40 percent – has resulted in heavy regional election losses for the ruling Socialist party of Prime Minister Jose Luis Rodriguez Zapatero, and substantial gains for the opposition center-right Popular Party.

While Zapatero has admitted defeat, he has not called for early national elections.

[The economic crisis] destroyed thousands of jobs,” Zapatero said.

“It is a crisis that had profound effects on citizens' morale. I know that many Spaniards suffer great hardship and fear for their futures. Today, without doubt, they expressed their discontent.”

Despite the fact that Zapatero is now a “lame duck” who may be unable to impose further austerity measures, anti-government protesters plan to continue with their demonstrations, particularly in the Puerta del Sol plaza of Madrid, despite a government ban on such exercises that very wisely did not involve police dispersion.

Similar rallies have taken place across the nation, including Barcelona, Valencia, Seville and Bilbao.

Zapatero will be forced to call a general election by March of next year; but he has assured he will not run for re-election.

Meanwhile, official unemployment in Spain is running at 21 percent, among the highest rates in the western world. Such a crisis has created a social movement the likes of which Spain has not witnessed in decades.

Jobless young people, calling themselves los indignados [the indignant], the creation of more employment, improvement of living standards, the reform of democracy and easing of the austerity program – requests not all that dissimilar to the desires expressed by protesters across the Arab world this spring.

Laura Gonzalez, Assistant Professor of Finance and Business Economics at Fordham University in New York, explained that the protest movement -- Democracia Real Ya (Real Democracy Now) – commenced on May 15, a week before the local and regional elections.

“The timing [was] a coincidence,” she said. “[The Protest movement] could have started earlier given that the Spaniards' frustration with unemployment has been going on for over two years.”

In fact, Gonzalez points out that the protesters did not appear to be supporting any political party during these demonstrations.

Rather they are expressing a widespread discontent over the economic health of the Spanish nation.

“[The protesters] did not ask [to] vote for or against any [particular] party,” she noted.

“They actually do not believe any of the two majority parties can do much as of today, without reform. They are pro-democracy, but they want a ‘real’ democratic system with a government that provides opportunities for all, especially for the young people -- below 35 – who are suffering very high unemployment.”

While the public demonstrations have largely been peaceful (and without much police intervention), economic problems in Spain are so deep and entrenched that protests are likely to continue.

They are also affecting the social fabric.

“Very few young [jobless] Spaniards receive any unemployment benefits,” Gonzalez explained.

“And if they do so, they are [at the] minimum and [provided] for a very short period of time. It's very common for young people in their thirties to still be living with their parents, and to postpone such events as marriage, having children and buying an apartment. All this while politicians keep raising their salaries”

Joblessness and a broken economy have changed the way Spaniards live and view their futures.

For example, Gonzalez cites that when a homeowner defaults on mortgage payments, the bank keeps the property but maintains the debt, making it virtually impossible for the person to secure new housing.

Even people who have jobs are seeing increased instability in their work environments – fewer hours, less pay, hourly salaries rather than fixed weekly wages, etc.

“Many people that continue to be employed have reached agreements with their firms to work fewer days in order to reduce salary expenses, thereby to maintain the position and keep the companies running,” Gonzalez said.

Government-mandated austerity measures have further imposed burdens on Spanish workers.

Gonzalez explained that the Socialist government has raised the retirement age to 67 and increased the number of years of Social Security contribution (which means people have to work longer to receive the same pension as before), increased taxes, and frozen the salaries of public employees.

“They are also not replacing an equal number of state employees who retire,” she noted. “That is, if 20 public workers retire, only 10 to 15 of those positions are being replaced. This is occurring in education, health care, police, and across the board.”

Also, she says, the tax increases are unevenly distributed across economic classes. Since December 31, 2010 homebuyers cannot use mortgage interest payments to deduct taxes, but the inheritance tax has been levied, a reform that further hurts the middle class while benefiting the wealthy.

Banks have been at the very center of the global financial crisis – but Spanish banks are facing an unfair Catch-22.

“The large national Spanish banks are sound,” Gonzalez said. ”The problem is that the international markets have no confidence in them simply because they are from Spain. Because of this, Spanish banks are charged a significant differential with respect to, say, the German banks.”

Gonzalez explains that it is the regional savings banks, or cajas, which are in trouble. These regional banks were being managed by local politicians and some will be bailed out or bought [out] by solvent cajas, or they will fail,” she added.

Gonzalez adds, however, that in some ways the current unrest in Spain differs greatly from the movement against Francisco Franco four decades ago, and also differs from the ongoing strife in North Africa and Middle East.

“Demonstrations in the past in Spain were primarily organized by politicians and labor unions,” she noted. “The present-day protests involve non-political citizens of virtually all ages.”

With respect to the anti-government protests in the Arab world, Gonzalez indicates that Spain is already a stable, democratic country and that demonstrators are seeking improvements in the economy, not a revolution and toppling of the whole system.

“Spaniards today have more opportunities than they did in the past and certainly more than North Africans have now” she said.

“And the demonstrations have been peaceful – we have not witnessed anything remotely like the violence [perpetrated by] police and state security in the Arab countries against protesters.”

Despite the worries, Gonzalez is confident that Spain will recover, although it will take some time and also radically change some social dynamics.

“This is the last generation that can live on their parents' homes and pensions,” she said.

“The local elections are a good indicator of what will most likely happen in the general elections of 2012. As expected, since the Socialist government denied the [economic] crisis until it was too late, and [then] did not address it well, they have been punished and will be so again in 2012.”

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