In Defence of Marxism

In Britain we have had the first reports of falls in house prices, but they are trying to convince everyone that it won't be too steep. Spain until recently had a booming economy, but now its housing market is in meltdown.

Spain's National Statistical Institute (INE) announced recently that the buying and selling of homes fell by 27 per cent in January compared to one year earlier. This came at the same time as a collapse of 25 per cent in the number of mortgages granted. Catalonia, one of the wealthier parts of Spain, saw a dizzying 42.7 per cent drop in property transactions, while Madrid has practically come to a halt.

"We have to accept this is not a gentle correction, but a full-blown crisis. We can only hope it will be sharp and short (...) now it's clear the sector is in crisis, there's a danger people will make things worse by panicking and predicting disaster. It's a herd mentality," said Fernando Encinar, a director of idealista.com, Spain's leading online estate agent. Miguel Blesa, president of the Caja Madrid savings bank, Spain's second leading mortgage provider, added to the gloom by stating that things would get worse not better. 

This is having an impact on Spain's building. Spain's National Construction Confederation has called on the government give greater tax breaks for first-time buyers, to stop the downturn. In fact, several high-profile construction companies have gone bankrupt in recent months because with sales paralysed, they were unable repay their massive bank loans.

That is the scenario in Spain. They told the recession was isolated to the USA, that it wouldn't spread and many other fairy tales too. The fact is that what is happening in Spain is beginning to spread everywhere in Europe. There is no escaping the recession as it is not a national but an international phenomenon. It is not the problem of this or that country, it is the world capitalist system that is in crisis.