In Segovia, a one hour train ride northwest of Madrid, stands a  magnificent work of ancient Roman engineering: the Segovia Aqueduct.  Built nearly 2000 years ago, it remained in use until the mid-nineteenth  century and continues to tower above the bustling streets. Legend has  it that the devil himself, aspiring to secure a young woman’s soul, constructed the 166 stone arches in one single night. Accordingly, it is  known as the “Puente de Diablo” or the Devil’s Bridge. A few weeks ago,  I had lunch beside this very bridge. Sitting at a wobbly table on a  steep cobblestone pathway and waiting for our meal, a fire broke out in  the kitchen. We heard the swoosh of a fire extinguisher peppered with  some Spanish curse words. A few minutes later the chef ran by, coughing  and swearing, aiming for the bar next door. Shortly thereafter, he  approached our table and asked if we’d do with a salad. We did, and as  all Spanish food in general, it was plentiful and delicious.

There is something inexplicable about people in crisis. Some seem  confused and foggy, some hopeless, some angry. Others just crack on. And  there is something daunting about legends; those traditional stories  often regarded as historical but never entirely rooted in fact. That is  not to say they are always false. Indeed, many are based in true events  to which some extra spice has been added over time. The Segovia Aqueduct  exists, yet we also know that it wasn’t built by Lucifer but rather by  the bare hands of people. Some legends, however, stick like magnets to  our minds and blur the lines between what is, and is not. When in  crisis, this can have detrimental effects.

For the past six years, Spain has been severely struck by the  economic crisis, which forced the government to take drastic austerity  measures. These included a €8.9bn cut in public spending in 2012, a  labour market reform that loosened the regulations for collective  dismissals, and a new employment agreement with a trial period of one  year, during the duration of which employers can terminate the contracts  without any kind of compensation. The word crisis has since  found its way into the popular street-lexicon and public consciousness,  like a tapeworm that constantly feeds on the latest events. When talking  to Spaniards, everyone seems to be wearing crisis-tinted spectacles and  everything seems to be linked to the crisis in one way or another. It’s  a bit like talking about the weather in a valley where it hasn’t  stopped raining for years. Raining again? Still crisis?

As it turns out, politicians and contractors also had been feeding  off each other while the housing bubble grew larger, with the former  treasurer of the ruling People’s Party admitting to having forwarded  cash gifts from construction magnates to top politicians. Later last  year, the Spanish king’s son-in-law was indicted of misappropriating six million euros of public money.

Luckily, the economy is showing tentative signs of recovery,  with hedge funds and common-or-garden investors once again putting out  their feelers across the seemingly recuperating peninsula. But like the  first sun-beam piercing through a rainy day, the clouds still seem very  real. It appears as though capital is faster than the EU-funded  high-speed rail projects and labour recovery. As it stands, youth  unemployment remains staggering, leaving a generation of young people  not only facing a bleak future but leading them to believe that they  have nothing meaningful to contribute. The crisis has left deep scars  and it mostly affected the lower strata of the wage-labour population.  In particular, it shook immigrants, who were attracted to Spain by the growth  of the past fifteen years. Within a few years Spain has moved from  being the poster child of European engagement and inclusiveness to a  leaflet showing its adverse effects. The crisis fuelled the retelling of  legends across Europe, serving as cautionary tales for the people  afraid of suffering the same fate. “Be careful”, seems to be the  message, “if we don’t cut public spending, the same might happen to  you”. But all is not nearly as clear-cut as headline figures suggest.

While Spain’s condition has various roots, none of them grew from overblown public expenditures or labour protection. One widespread narrative  in the Spanish saga is that the country’s unyielding labour market  rigidities was causing Spain’s high unemployment, which pressured the  government to abolish job protection and permanent fixed contracts. This  has led to almost four million employees being laid off.  Yet, if getting rid of these rigidities were the cause of unemployment,  other European countries with more unbending job protections would show  even higher unemployment rates.

Is it public expenditure then? Has the Spanish state spent above its means for too long? Against common belief, Spain boasts one of the lower public expenditures per capita  within the EU 15, which was also the case when the crisis began in  2007. Indeed, unemployment can be linked to sluggish job creation. While  a functioning physical infrastructure was being developed and public  healthcare had been put in place, it remained a bloodless system,  understaffed, and thus unable to pump jobs and life into society. Among  its Eurozone peers, Spain claims one of the lowest rates of state  revenues, public employment, and comparatively undersized public  services. As a relic of Franco’s dictatorship, the country boasts the highest number of police force per inhabitant but likewise the lowest figure of adults employed by the welfare state. In 2012, merely one in ten adults worked  “in the public services of the welfare (such as medical care,  education, and social services) compared with one out of every six on  average in the EU-15 and one out of every four in Sweden”. What ought to  be a neoliberal dream come true has not materialised in economic  benefits for the many.

Surely, it must be laziness, apparently a prevalent vice  among the capricious, lethargic, and squandering southerners. There is  scant evidence that this is the case. On the contrary, Spaniards work  long, unsociable hours and their workplaces are too far away from home  in order to have the legendary fiesta. According to a report  issued by the UK Office for National Statistics, Spaniards and Germans  spend nearly the same amount of time on the job. Incidentally, the low  unemployment in Germany is rather a sign of the common “work sharing”  practice than a free labour market, which is a result of the powerful  German trade unions, the very unions the European Commission of Economic  and Monetary Affairs is suggesting to weaken in Spain. While harsh  reforms have been put in place in the South, Germany has been serenely  peddling a softer line.

Rather, the reasons for Spain’s continuing economic struggle are to  be found in the European Central Bank’s disproportionate emphasis on  maintaining the inflation rate low and preserving price stability at the  expense of labour protection, the country’s growing corruption, and an  incomplete and unstable process of decentralisation. As anywhere, but  particularly in Spain, the financial industry seemed to have an unwarranted influence  over politics. Before joining the Eurozone, Spain reduced its public  deficit not by increasing taxes but by reducing public expenditure. Even  during the boom years before the crisis, when Spain experienced  exponential economic growth, rather than raising corporate tariffs or  retaining property taxes, the former were slashed and the latter  abolished.

What seems particularly damaging is not only that the Europe-wide  focus (i.e. the fiscal compact) keeps emphasising public expenditure  cuts, but also that it has led to a deviation from the path that Spain  was following towards a socially responsible and environmentally  sustainable welfare state. Meanwhile, many of the extraordinary  accomplishments of the young democracy have faded from the spotlight. As  a case in point, Spain claims one of the largest solar industries in  the world. And as of last year, it produced over twenty percent of its electricity  with wind turbines making it one of Europe’s major windmill. Over the  last 20 years and with the help of EU regional aid funds, Spain has  constructed what could be seen as Europe’s most outstanding high-speed  rail network. And though by some deemed overly bold urban schemes and  some lavish theme parks, museums, and art galleries too many, the  cities’ infrastructure is well-equipped to handle many future demands.  Most remarkably, Spain has undergone some of the most dramatic social  changes in recent times. While General Franco, a firm supporter of the  Catholic Church, outlawed contraception, abortion, and divorce (adultery  was only punishable for women, not for men), Spain until recently  provided some of the world’s highest degrees of equality and personal liberty. Yet, the enactment of a worrying abortion bill this  year shows how quickly such liberties can erode. As the fog of the  crisis descended and stuck, international reports are filled with  stories about failed economic schemes and massive blunders and thus  ignore the complexities to the country’s detriment.

“It’s like the black legend all over again”, a Spanish social worker told me, referring to the term “Leyenda Negra”  coined by the Spanish historian and sociologist Julián Juderías in  1913. The phrase refers to the anti-Spanish popular stories which  circulated in Protestant Europe since the late sixteenth century. Their  aim was to cast all Spanish history in a negative light so as to  undermine Catholic Spain’s war effort during the Dutch Revolt  (1581-1648). In England, such accounts served to warrant the country’s  piracy against foreign trade and  the Spanish crown. One prominent  example of ignoring Spain’s positive achievements would be the country’s  efforts to pass protective laws for native Americans, which made it the  sole colonial power to legally ban the mistreatment of indigenous  people and curbing the authority of European landowners. While later  historians mitigated this bleak depiction of Western Spanish history,  with some calling Juderías’ accounts “white legends” that idealised  Spain’s past, there are indeed some instances of ill-reported historical  facts. One concerns the often narrated phenomenon of the infamous  “Spanish Inquisition”. Only recently, by gaining access to new archival  records, have scholars discovered that the brutality and massacres  associated with the tribunals were quite moderate when compared to the  witchhunts and incarceration in other European countries. The number of  victims has also been highly exaggerated. In an attempt to historicise  the Inquisition, veteran British historian Henry Kamen notes  that in the mid-16th century for instance, the Netherlands already  possessed an Inquisition of its own” and that between 1557 and 1562 the  courts of Antwerp “executed 103 heretics, more than died in the whole of  Spain in that period”. The Inquisition’s trials were certainly far from  justifiable, but in light of other atrocities at the time, they have  been disproportionately represented in our historical consciousness.

The restaurant next to the Segovian Aqueduct – with the fire extinguisher in the kitchen

How will we perceive Spain’s economic crisis in the future? Will we  see Spain as an overblown and excessive public spender that had to be  put in its place? Looking at Spain today, it is hard to be optimistic,  though strangely enough, quite a few Spaniards I encountered are. And  like the chef that had just put out a fire in his kitchen, most of them  seem to crack on. While the Spanish state is employing too few of its  citizens, it can rely on the strong role of family networks in Spanish  society, which for now still offer financial and emotional relief for  many. And while many of the young don’t work officially, the ‘black’  economy is booming, with the Spanish Finance Ministry estimating the  under-the-table business in 2012 at 24.6 percent of GDP.  Yes, in Spain a real estate bubble burst, as did in other countries.  But when the fire broke out, instead of using the fire extinguisher in  the kitchen where banks brewed up speculative crashes, the welfare state  and job protection became the target. It might be time for the Spanish  government to rethink its policies, use its infrastructure, and pump  blood into a system that has been created in an astoundingly brief time.  As for its European counterparts, we should leave the legends to the  tourist guides and take a closer look.