Spain's new middle classes slip into poverty

By Andrew Hay

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.