Spain's new middle classes slip into poverty
MOSTOLES (Reuters) - Mari Cruz keeps her designer sunglasses perched in her hair as she lunches on pork and vegetables from a blue plastic tray in the first municipal soup kitchen Spain has set up for its army of unemployed.
"My parents had it better," said the mother of three, sitting alongside Ecuadorean and Romanian immigrants who were laid off early in the crisis. "At least they had food in the house and jobs to go to."
In her early forties, she and her husband Antonio used to dine out each week at restaurants. They asked that their last name not be used as they have joined hundreds of thousands of families in Spain sinking below the bread line.
They form a generation of Spaniards hoisted into the middle classes by cheap euro-zone credit and well-paid construction work, but who are now losing jobs and defaulting on debt in what may be the fiercest recession in a developed country.
Spain's problems can be seen in ranks of brand new, empty apartment blocks, abandoned building sites and deserted shopping centres that ring Madrid -- a situation Nobel-prize winning economist Paul Krugman likens to California and Florida.
Its tightly regulated banks are feeling the strain after bad loans quadrupled in the past year, leading to the country's first bank rescue of the global crisis in March.
"This place is not the answer, we need jobs," snapped Antonio angrily. The soup kitchen in commuter city of Mostoles on the outskirts of Madrid was set up by the conservative Popular Party council to cope with 16 percent unemployment. That is by far the highest rate in the 27-member European Union.
Spain faces a summer of rising social tension as dole payments end for some unemployed people, and the desperate blame immigrants for their problems or say they are tempted to steal rather than go hungry.
"The crisis is having a devastating effect on the middle class and lower middle class, who gained living standards they took for granted and are now losing," said Ismael Crespo, a political analyst at the Ortega y Gasset Institute.
"The result will be increasing crime for classes not hit by unemployment."
With only secondary education, and no experience outside the construction industry, Spaniards like Antonio are ill-equipped for the technology-driven economy that Prime Minister Jose Luis Rodriguez Zapatero hopes to build over the next five years.
Mari Cruz is pushing her children to get a better education than she had, or at least stay in a system with one of the highest drop-out rates for any developed country, according to the Organisation for Economic Cooperation and Development.
One in three pupils in Spain fail to complete compulsory education to 16, OECD figures show.
RUNNING OUT OF DOLE
Antonio has 18 months of unemployment benefit payments left, but the dole has already run out for Jose Maria Garcia Martinez and a million other jobless. Petty crime is expected to leap this summer as benefits stop for a million more.
Unemployed builder Garcia Martinez says he cannot rely on other unemployed family members and each day is a struggle to find work and avoid hunger.
"If I come here I'm okay, but if I go hungry I start getting bad thoughts, I start thinking about going out onto the streets to steal," said Garcia Martinez, 33, talking to an Ecuadorean immigrant whose home had just been repossessed by her bank.
Spain already has one of the highest rates of poverty in the European Union at 8.5 million people or 19 percent of the population, according to Catholic anti-poverty Group Caritas.
The level could top 9 million next year, given forecasts unemployment will rise above 20 percent or 5 million people.
The 2007 collapse of Spain's house-building boom left families with debts of 130 percent of disposable income, compared with 60 percent when Spain adopted the euro.
Eating nearby, Victorio Sanchez Castillo had just stopped payments on his holiday home in Alicante on Spain's Mediterranean coast, which he bought with a second mortgage.
The unemployed waiter said Spaniards used credit to live beyond their means, and are paying the price, but blamed unemployment on immigrants: "They have stolen jobs."
Spain's 5.3 million immigrants helped double the country's per-capita income in a decade and turned it into the world's eighth-largest economy, but are now competing with natives for a shrinking number of service-sector jobs at wages that can be less than half their boom-year levels.
Analysts see growing friction between the two groups, although no significant growth of radical movements, which remain on the sidelines of Spanish politics.
"I don't see dramatic social problems," said economics professor Pere Puig at Spain's Esade business school. "What I do see is a crisis psychology which is strangling the economy."
ASPIRE TO NOTHING
That means people losing sight of aspirations.
Antonio and Mari Cruz, like millions, had borrowed heavily to buy a home and cars and live lives their working-class parents dreamed of when they moved from the countryside to Madrid in the 1960s.
Mari Cruz was laid off first, from a catering firm; Antonio lost his construction job in March.
Still well dressed, the couple are on the brink of poverty -- defined by the European Union as an income of under 550 euros (495 pounds) a head per month. Their only income is his 1,280 euro dole, not enough to pay 1,300 euros on mortgage, consumer loan and credit card payments.
They eat at the soup kitchen to save 150 euros a month to feed their three children.
To head off such depression, Prime Minister Zapatero launched one of Europe's largest stimulus plans including public works projects to provide up to 250,000 jobs by May for people like Antonio.
Antonio has seen no sign of such work and is looking as far as Africa for employment. He says it is only a matter of time before he defaults on his mortgage.
The couple are ashamed to be seen entering the soup kitchen's grey metal doors, formerly open only to the homeless and elderly. Mari Cruz doesn't take her children inside the hall, where Spaniards and immigrants eat in silence beneath flower-adorned pictures of the Virgin Mary and saints.
"If we had known what was going to happen, we would not have borrowed like we did, but no-one knew," she says, tension in her voice.
(Reporting by Andrew Hay; Editing by Sara Ledwith)
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