Spain’s Economy Sends City Residents Back to Country

The following is an excerpt from an article in:


The New York Times
Thursday, September 13, 2012

Spain’s Economy Sends City Residents Back to Country

By RAPHAEL MINDER

VILLANUEVA DE LA VERA, Spain — A chemist by training, Silvia Barcenilla searched for a job in Madrid for almost a year. But in March, she decided to try a different approach, moving here to the village of Villanueva de la Vera, a two-and-a-half-hour drive to the west.

Within two months, she was working for a resort, the Hospedería del Silencio, which runs yoga courses and other recreation activities on onetime farmland. She signed a lease on a two-bedroom apartment for 200 euros, or about $255, a month, just a fraction of what it would cost her in Madrid. “If I had found a great job in Madrid, I would not even have thought about moving here,” she said. “But now I don’t see any obvious reason to go back.”

Ms. Barcenilla is part of a movement within Spain that has swelled to such proportions that some sociologists have dubbed it “rurbanismo,” a term invented to describe the reverse migration from city to country that has stemmed a generations-old trend that has long been the usual pattern in most advanced industrial economies.

The movement has steadily built, but it has been accelerated by Spain’s economic crisis, breathing new life and entrepreneurship into some nearly abandoned areas. “Rurbanismo started before the crisis, once the Internet took off and made it possible to work anywhere, but what the crisis is doing is making the model more attractive,” said Carles Feixa, a professor of social anthropology at the University of Lleida.

The movement is difficult to quantify, he said, partly since many of the new migrants do not bother changing their official residence. But it is clear, he said, that Spain’s cities of more than 100,000 inhabitants have recently stopped growing while villages of fewer than 1,000 are no longer shrinking.

Some of these new migrants are returning to the villages where they grew up or where earlier generations of their family lived, sometimes taking over property that had been left empty or used only for vacations.

Economic necessity is certainly not the only reason Spaniards are moving to the country. Around Villanueva, for instance, a community of artists has sprouted, from graphic designers to musicians and sculptors. Some have restored farm buildings in which tobacco and peppers used to dry.

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Shut Out of the Debt Markets, Catalonia Asks Madrid for Emergency Aid

The following is an excerpt from an article in 

The New York Times
Wednesday, August 29, 2012

Shut Out of the Debt Markets, Catalonia Asks Madrid for Emergency Aid

By RAPHAEL MINDER

MADRID — The most economically important region of Spain, Catalonia, asked the national government on Tuesday for more than 5 billion euros in emergency financing, underscoring a growing regional debt burden as the country struggles to pull out of its economic tailspin.

Catalonia says it can no longer obtain loans in the financial markets to support its debt. Just last month, the Valencia and Murcia regions both said that they would need help from a new 18 billion euro, or $23 billion, fund set up by the Spanish government.

The government of the Spanish prime minister, Mariano Rajoy, has been struggling to meet its budgetary commitments to the euro zone and avoid requiring a Greek-style bailout. Already, Europe has committed to lending Spain up to 100 billion euros to prop up its banking industry.

Whether Spain will itself have to request a European rescue depends in part on whether its 17 semiautonomous regions can clean up their finances and stick to budgetary targets this year. The fact that a region like Catalonia cannot meet its debt-financing obligations “is the big problem in this country at the moment,” Mr. Rajoy said Tuesday.

Mr. Rajoy was speaking after meeting on Tuesday in Madrid with Herman Van Rompuy, the president of the European Council, the administrative arm of the European Union. Both denied that Spain was already negotiating aid beyond the bank bailout. Mr. Van Rompuy said it would be up to Spain to decide whether to apply for more aid.

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Clash of Cultures Upends Spain’s Cajas

The following is an excerpt from an article in 

The New York Times
Tuesday, August 21, 2012

Clash of Cultures Upends Spain’s Cajas

By RAPHAEL MINDER

VIGO, SPAIN — In the manner of an earlier, more courtly style of Spanish banking, he liked to be called Don Julio by his employees and the businessmen and government officials here in the city where he was born.

And during the more than four decades that Julio Fernández Gayoso ran what eventually became the biggest savings bank, or caja, in northwestern Spain, the institution helped transform the city of Vigo, an industrial port city nearly 500 kilometers, or 310 miles, from Madrid.

It was thus a steep fall from power in late June when Mr. Gayoso, age 80, was forced out after being named as a defendant in a lawsuit filed by anti-fraud investigators.

Whatever the result of that lawsuit, Mr. Gayoso has emerged as a symbol of the clash between the time-honored tradition of the caja as a baronial community institution and the modern, euro-based banking economy that Spain has tried to create in recent decades.

This collision of business cultures played out in various ways among the 45 cajas that operated in Spain until early 2010, more than a year after the real estate bubble burst. Together, these clashes helped bring the country’s banking industry to the brink of collapse, prompting European finance ministers in June to devise an emergency €100 billion, or $123.4 billion, rescue plan for the sector.

In the years before the real estate collapse, Mr. Gayoso and his caja, Caixanova, financed Vigo’s first university campus. They built or acquired some of the grandest buildings along the city’s main thoroughfare. And through Caixanova, Mr. Gayoso became a leading patron of the arts, assembling an impressive painting collection hung at various cultural centers sponsored by the bank.

“This is a workers’ city, but even our Communist painters got so many commissions from him that they portrayed him as a god,” said Carlos González Príncipe, a former mayor of Vigo.

Mr. Gayoso resigned just days after investigators filed suit against him and four other board members, accusing the executives of surreptitiously setting up multimillion-euro retirement plans for themselves after the 2010 merger between Mr. Gayoso’s caja and another savings bank in the Galicia region.

The merged institution, Novacaixagalicia, was Spain’s fifth-largest savings bank, with about 8,000 employees, almost three million clients and annual revenue of €124 billion.

Last year, the state took control of Novacaixagalicia and pumped in €2.5 billion of capital to offset the bank’s burgeoning portfolio of problem loans.

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