Scorched earth in Madrid – and worse to come

The crisis has knocked the stuffing out of Madrid, not so long ago one of Europe’s most vibrant capitals. This is what I noticed on my visit this week:

– At a time of rapidly rising unemployment, metro fares have gone up substantially.

– Subsidies for the arts have dried up almost completely. At the Casa Encendida cultural centre, an annual festival held for 10 years has just taken place for the last time.

– The bottom has fallen out of Spain’s thriving cinema market: this spring only two films were being made at the main Alicante film studios, compared with a dozen a year ago.

– Artists who had flocked to Madrid from all over Latin America are returning home. Other immigrants are doing likewise.

– At the airport’s spanking new Terminal 4, passengers are few and far between in its vast empty spaces.

– Banks which the European Union is helping to write down their dud property loans are shrinking the balance sheets. So mortgages are suddenly scarce.

– Over-heated Madrid property prices remain unrealistically high. Few sales take place, and when they do, it is an average of 23% below asking prices. Further falls seem inevitable.

– Restaurants are expensive and losing guests. Young people meet at each other’s homes instead of at tapas bars. With the euro, Spain could not devalue to remain competitive, so restaurants complacently allowed their value for money to erode. Few seem to realise the threat to their survival.

Instead of an excited buzz, Madrid is characterised by worried looks, penny-pinching, abandonment of projects, lowered expectations and packed up bags. Where once it was fun, now it is serious.

Madrid has gone quiet. That’s how bad it is – and it could well get worse.

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