Just as incoming American presidents are given the atomic “briefcase” by their predecessors, along with the codes for launching a nuclear attack, perhaps Spanish prime ministers will henceforth receive a begging cup and a German phrasebook. It was al Qaeda that made José Luis Rodríguez Zapatero of the Socialist Workers’ party (PSOE) Spain’s prime minister; Lehman Brothers and the euro crisis have unmade him, putting his country at the financial mercy of its European neighbors. Zapatero came to power when jihadists bombed several trains in the heart of Madrid on election weekend 2004. The bombs convinced Spaniards they would be safer voting for the candidate more congenial to al Qaeda’s reading of the Iraq war.

This week prime minister-elect Mariano Rajoy, leader of the conservative Popular party, put an end to seven years of Zapaterismo. He will take power on Christmas Eve. Zapatero’s successor as PSOE standard-bearer, Alfredo Pérez Rubalcaba, got the lowest vote total the Socialists have ever received. It was Rajoy whom Zapatero beat in 2004, to the surprise of everyone, including Zapatero himself. Once he had pulled Spain out of the Iraq war coalition, he struggled to find things to do. That meant indulging the whims of whatever interest group was complaining most loudly. The achievements of the Zapatero years are numerous and nugatory. Gay marriage. A record number of women in the cabinet. Divorce reform.

Spain’s predicament in the economic crisis was the opposite of most countries’. Many, like Ireland, had a mostly healthy real economy that was undone by the excesses of the financial sector. Spain’s financial sector was quite responsible—although the country had a real estate bubble, it emerged from it better than the United States in many respects. It did not have a lot of securitization or derivatives. It had stringent capital requirements for home mortgages. It had a central bank that was competent and alert. But starting in the Franco era, Spain’s labor market had been strictly regulated to provide security at the expense of income. With the coming of democracy in the late 1970s, the benefits offered to workers grew ever more generous. The result is a two-tier labor market. Workers in old, inefficient industries have preposterously generous pay packages and benefits. But companies cannot afford to hire young Spaniards.

It is in Spain, more than in any other country, that one can see the weak position of European youth in the face of the present crisis. The unemployment rate for 18- to 24-year-olds in the job market is 46 percent. And they are weak politically. Although many have been occupying various plazas in Spain, starting with Madrid’s Puerta del Sol, since May, they have so far been unable to get either Zapatero or Rajoy to take them seriously. This weakness may have a demographic cause. The collapse of Spanish birthrates means that young adults have less than half the weight in Spain’s population that they had at midcentury.

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