Slump, creaky economy, oil pose stiff EC test for Spain

Saddled with soaring inflation, lack of confidence within the business community, and the highest unemployment in Europe, the Spanish government faces a formidable task.

Not only does it have to steer the economy out of its worst recession in recent years; it has to alter -- and radically -- many of the existing antiquated structures inherited from the Franco era in order to prepare Spain for entry into the European Community and to make way for a market economy.

What Spain's present crisis shares with other European countries is the quantum leap in oil prices during the past several years.

Oil imports to Spain in 1980 will cost around $12 billion, turning what should be a trade surplus into a trade deficit. In 1979, Spain's gross receipts from tourism effectively covered the oil bill. This year they will cover less than 60 percent.

The rise in oil prices has pushed up costs for both industry and agriculture, setting off a chain reaction, the last and most serious consequence of which is unemployment.

The government is pinning its hopes on a 10-year nuclear energy program -- one of the most ambitious in Europe -- that should eventually create 35,000 jobs. Along with greater use of coal, nuclear energy is seen as the principal means of reducing Spain's external dependency on oil.

But the shake-up in industry and services caused by the recession is continuing. Indeed, industry's survival in Spain has been due mainly to labor cutbacks -- even though the present industrial crisis is in part a reflection of inefficient management.

Until 1975 many businessmen and industrialists in Spain convinced themselves that the energy crisis would somehow not reach Spain. They also believed the high growth rates (and profits) of the early '70s would last. As a result, unemployment has emerged as a major preoccupation in the Basque country, where the increase in industrial joblessness is the highest in the country. On top of this, the country's leading trade unions, led by the Communists and Socialists, are divided and weak.

But apart from the Basque country, Spaniards have so far shown an unusual capacity to absorb the political and social difficulties of urban unemployment. Here, the system of the extended family and the practice of people holding down more than one job are peculiarities that function much like built-pressure valves.

Agricultural unemployment, however, is different. One of the most striking features of modern Spain is that only 25 percent of the rural unemployed still receive state assistance. In addition, official unemployment figures of well over 16 percent do not reflect the real picture.

Spain's southern region of Andalucia is particularly hard hit by agricultural unemployment. The agricultural census in Andalucia includes only those who carry employment cards (i.e., few women and children), and it does not include the seasonal workers -- the "jornaleros" -- who are estimated to number 440,000 by the Farm Workers Syndicate (SOC). This is a radical labor movement led by a Jesuit priest. It is now the only union in Andalucia carrying out a serious assistance program to farm workers.

The plight of the jornaleros has remained unchanged for centuries. They are hired by the day, the month, or the season -- rarely any longer -- by the owners of the large private Andalucia estates or the tenant farmers who rent from them. But for more than half the year they are unemployed.

Further aggravating the problem, there are virtually no industries related to agriculture in the region. Landowners, faced with the need to make agriculture competitive because of the gradual liberalization of imports, have tended to abandon their farms rather than modernize them. And, in an attempt to cut costs , many farms are cutting back on traditional labor-intensive crops like sugar beets, cotton, olives, tobacco, and cereals, which are capital-intensive.

Moreover, the massive exodus of farm workers to cities in the north and elsewhere in Europe, which took place in the '60s, is beginning to be reversed. As industrial unemployment increases, many migrants are returning to their villages.

In these circumstances the level of social conflict is growing. There have been almost continuous "symbolic" land occupations organized by the SOC; demonstrations in Seville, Malaga, and Granada; the blocking of automobiles and trains; strikes; and occasional reports of clashes between the jornaleros and members of the paramilitary Civil Guard.

Against this background, Andalucia's frustration at having failed to obtain the same measure of autonomy as the Basques and Catalans enjoy may prove to be the last straw.

Both the Spanish Communist and Socialist unions have called for a general strike in Andalucia. The union leaders say they fear that if they do not take a stand now, their members in the region may slip out of their control.