Atlantic Cities

Casinos, Corporate Sponsorship, and Tuition Hikes: How Madrid Is Trying to Beat the Recession

Casinos, Corporate Sponsorship, and Tuition Hikes: How Madrid Is Trying to Beat the Recession
Reuters

While there are signs that Spain’s economy is slowly rallying, Madrid is still a city swimming through a toxic cocktail of debt and unemployment. As the capital of a country where over a quarter of the workforce is jobless, Madrid has failed even to cash in on a sharp rise in tourist trips to Spain despite remaining one of Europe’s most delightful cities to visit.

That doesn’t mean the city’s government isn’t making an effort to change things. In fact, it’s trying a host of measures, ranging from the supposed tough love of brutal austerity measures to hawking its metro system out to commercial sponsors. In an unlikely mix of state pruning and raw commercialism, the city is rooting around for numerous ways out of its current impasse. These are some of the key ways Madrid’s right wing government is trying to make the city work.


A woman walks up the stairs at Vodafone-Sol metro station in Madrid. (Juan Medina/Reuters)

They’re letting a phone company rename their subway network

Arrive by Metro at Puerta Del Sol, Madrid’s central square, and you’ll find the station has been renamed Vodafone Sol in honor of the British telecommunications company. In a step almost unknown in Europe, Vodafone have purchased the right to rebrand an entire line of the Metro system for 3 million. Starting in September, Line 2 will be known as Line 2 Vodafone for at least three years. Metro bosses must be relieved to see their finances partly plugged, but it remains to be seen how much of a boost the sponsorship deal gives Vodafone. There’s been resentment of the move locally, perhaps understandable in a country that still has living memories of streets and squares being renamed without consultation after General Franco and his flunkies.

They’re keeping a billion more of the money they used to send to Barcelona.

The subject of where tax money goes is even more fraught in Spain than in most countries. Autonomous and with some secessionist ambitions, the substantially Catalan-speaking region of Catalonia has long been one of the country’s economic powerhouses. Catalans often feel they’ve been having their fiscal blood sucked by a host of other regions packed with feckless, work-shy siesta lovers. Outside the region, however, many feel that Catalonia got an unfairly good deal from the former socialist government, as a way of dampening any pro-independence grumblings.

Now with a downturn nationwide, Spain’s central government is staunching the flow of cash, redistributing a billion euros less this year than in 2012 to Catalonia’s regional government in Barcelona. It’s likely Madrid will get a good chunk of this – Spain’s finance minister said recently that when it came to national funding, Madrid got the worst deal of any Spanish region. Certainly, pressure in Barcelona is slightly less intense, as its tourism sector continues to expand and thrive while Madrid’s struggles.


Demonstrators protest against Las Vegas Sands' planned gambling complex in central Madrid. (Andrea Comas/Reuters)

They’re building Europe’s largest ever casino

If all goes to plan, American gambling corporation Las Vegas Sands will soon be pumping almost 10 billion into a massive casino and conference center in the Madrid suburbs. Promising a potential 10,000 new jobs, it looks to be a huge, splashy project that will resemble two mammoth glass fingers stuck in the air when it’s complete.

Already dubbed Eurovegas, its development has currently stalled while developers try to strong-arm the Spanish government into exempting the complex from the country’s smoking ban. In some ways, Eurovegas's blueprints resemble the many eye-catching urban projects Spain sank cash into in the past few decades in an attempt to replicate Bilbao’s success with the Guggenheim Museum. This time, however, the project’s moneymaking potential doesn’t begin and end in a ticket office and gift shop. The casino’s proposed site, in a nondescript suburb on Castile’s dusty southern plateau, isn’t the most likely tourist hot spot.

They’re still building large-scale urban projects, but now the money is private

While out-of-control construction and a property speculation boom were key motors behind Spain’s current economic struggles, Madrid still hasn’t seen a total let-up in major building projects. Central Madrid’s Plaza de Canalejas is the proposed site of a huge development that will gut a belle époque building and its courtyard and use its shell to provide a nest for a luxury hotel and shopping mall. Eighteen major Spanish architects have signed a letter condemning the project’s destruction of a historic monument as cultural vandalism, but with a Spanish bank funding the project, many in the city are just glad to see that something is being built.


Craig Reedie, vice president of the International Olympic Committee commission, speaks during a news conference in Madrid. (Juan Medina/Reuters)

They’re trying to host the 2020 Olympics.


University students take part in a demonstration against cuts in education due to government austerity measures in central Madrid. (Juan Medina/Reuters)

They’re handing hospitals over to private companies and more than doubling tuition fees.

In a country like the United States that has always had private healthcare, the turning over of hospitals to private management might seem like a second rank headline. Not so in Madrid, however, where thousands of healthcare professionals demonstrated on Sunday against the proposed private management (not the actual privatization) of six city hospitals. In Europe such changes are always super-heated political issues, monetizing healthcare widely seen as a way to squeeze profit from misfortune, shifting Europe closer to the prospect of the sort of "death panels" that once made Sarah Palin shudder so.

Following public pressure, Spain’s high court has actually ordered Madrid to put its part-privatization plans on hold. Going full speed ahead, meanwhile, are plans to push up student tuition fees. Madrid’s public universities will see 20 percent fee hikes in the next year, going up to a 65 percent rise in two years. These are likely to be fiercely contested, as it’s hard to underestimate the psychological effect such measures have on young people already seeing their prospects shrink. For fans of the European social model, if you don’t get good state-funded healthcare and full education, there’s not much point being European.

Top image: Health workers take part in a protest against the local government's plan to cut public healthcare spending in Madrid. (Juan Medina/Reuters)

Feargus O'Sullivan covers Europe for The Atlantic Cities. All posts »

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