Why the Euro-cream turned sour in Spain

In the second in a series, Elizabeth Nash reports on the potential Emu pain for Madrid

The French welfare revolt has set Spain's authorities a-jitter. The Economy Minister, Pedro Solbes, has been trying to reassure everyone that nothing similar could occur this side of the Pyrenees as long as Spain holds to its economic policies. He argues that although the demands of Brussels must be met for Spain to be in the running for a single currency by 1999, sacrifices can be shared so that no one screams with pain.

He announced this week spending cuts of 900bn pesetas (pounds 4.8bn) over the next year but gave no indication where they might fall. Obvious targets are, as in France, pensions, social services and public-sector employment. Mr Solbes pledged to make no cuts in these areas.

Spain differs from France in two important respects.

First, the Spanish Socialist government has been achieving budget cuts for years by strenuous arm-twisting, accompanied by threats of worse treatment if deals are not reached. Second, Spain's welfare state, though an advance on what the government inherited when it came to power in 1982, falls far short of that enjoyed by the French.

The private sector takes much of the burden of health care and pensions which in France or Britain is borne by the state. The idea of a "cradle-to-grave" state provision is incomprehensible to most Spaniards, who look to their families to fulfil that responsibility.

Mr Solbes insists that Spain will meet the EU criteria for a single currency by 1999 and that trends are moving in the right direction. But Spain fails all the Maastricht criteria and Brussels fears it may not catch up in time.

"Our political advancement in Europe is fundamental," said Mr Solbes yesterday, when asked about prospects for a single currency.

Failure to meet the 1999 deadline would be a crushing blow for a nation that views EU membership as the seal upon its existence as a modern democracy.

But for millions of Spaniards, especially the unemployed, the European dream has already turned sour; further welfare cuts could tip the present mood of cynicism and apathy into one of revolt.