64 The Basque State and Socioeconomics Txomin Lorca Alcala Xabier Isasi Balantzategi Asier Otxoa de Retana Simon Nekane Jurado Pérez Antón Borja Alvarez Ekai Center Antxon Mendizabal Etxabe Aitor Bengoetxea Alkorta Francisco Letamendia Belzunce Iñaki Gil de San Vicente Larrañaga 65 Introduction Txomiin Lorca Allcalla,, Member off the LAB trade uniion Without a doubt, the area of economics and labour relations is fundamental in the building of a state. From this perspective it needs to be borne in mind that the economy cannot be understood without comprehending the relations of power that are created in the organisation of collective production. Also, it is essential to understand the consequences of those power relations in the area of production and in the political-institutional area that gives support to that area. Thus when we talk about what is produced, who produces it and how, we are not just talking about economics but rather economic policy. The only people who attempt to distinguish between economy and policy are those with special interests lurking behind the economy. They try to present economics to us as if it were an objective science, without any mention of the conflicts resulting from the ownership of the means of production. Economic policy determines both the organisation and the perpetuation of a country's economic system. Hence the organisation of any economic system requires an ability to make decisions to organise it; it therefore also requires that institutional instruments be acquired that make it possible to influence economic planning effectively. The highest expression of viability of a self-governing socioeconomic project is the building of one's own state. The authors of the chapters that follow develop this viewpoint by discussing the construction of a Basque state from a socioeconomic perspective. They also take into account the present context of economic crisis in their discussion; this crisis is creating ever greater contradictions and tensions between the production of surplus value and the owenership and management of that surplus, and at the same time also between the concentration of political power and the management of social needs. Thus the study aims to place the possibility of Euskal Herria getting its own state in the here and now: that is, in the context of the construction of Europe (the here) and of the present economic crisis (the now). When talking about the present economic crisis there is a generally shared opinion that this crisis is no ordinary crisis, because it transcends economic bounds and directly impacts on politics, the economy and society. We are confronted with a crisis with a systemic character, one which without any doubt is shaking the very pillars of the present developmental model. As Nekane Jurado says, this crisis has been surrounded by a fuzzy thing called "the market", whose real purpose is to conceal the interests at play behind it all while providing a perfect excuse for institutions to sidestep their responsibility to manage the crisis adequately. It would not be difficult to show today that a measure of the crisis facing the Spanish state is the drastic, unfortunate way in which it is forcing its effects on the Basque economy, precisely on account of our subordination to Spanish economic policy; for it is clear that our businesses, our production and social networks and our institutions are being hurt by the world standing of the Spanish economy, and by decisions forced upon us in matters of economy and employment by the Spanish and French states. 66 However, it is not our intention to make of the "failed state" argument our main grounds as a facile disqualification to justify the need for a Basque state — i.e. that Spain is a state that has "failed" because it was based on the negation of the national identity of its component peoples. As Xabier Isasi says, with or without the economic crisis, Euskal Herria could, without any difficulty, be a member state of the EU given that it is both as developed and as competitive economically as any other state of a similar size. No: the impediments to Euskal Herria becoming the 28th state of the EU are historical and, above all, political. The argument appealing to the out-of-date nature of present-day states in the international context — for they present themselves as political structures of a kind that is already outmoded, and the argument based on the economical viability of countries that wish to be European states today, are arguments hurled at us out of self-interest, in the manner of grenades, by states which have a stake of their own in stopping other oppressed national groups from achieving statehood. In this regard Iñaki Gil de San Vicente says that it is a strategic error for the Left to accept, with hardly any theoretical resistance, the thesis that states have stopped being necessary for peoples and that cosmopolitan ideas about "world citizenship" should be preferred, presenting world democratic "governance" as an alternative; such a supposed alternative translates, in fact, into global imposition of the economic superpowers. Also interesting is Francisco Letamendia's study of post-Fordism, which suggests that the present situation presents an opportunity to open up a social "nation building" process growing out of a hegemonic alliance on equal terms of popular classes, workers, trade unions, social movements and left-wing parties. THE VIATHE VIABILITYVIABILITY OF A BASQUE STATE, IN FIGURES Xabier Isasi looks at the characteristics of other European states and points out that there are sixteen states in the EU with either smaller territories or smaller populations than ours. The per capita GDP of Euskal Herria is higher than that of states such as France, Spain or Italy, and its total GDP ranks 36 out of Europe's 266 regions. We also rate better than many other regions and states in Europe in productivity, training etc. According to data on economic flow provided in this volume by Nekane Jurado: The southern Basque Country's trade balance between exports and imports is positive, with an increasingly large trade surplus: in 2010 the surplus was €5,227.8m. Two-thirds of our exports are to the EU. As regards the inter-institutional financial flow with the Spanish state, according to Jurado in the period 2004-2009 more than €11,700m were transferred from the southern Basque Country to Madrid in cash, whereas the Spanish state's investments in the southern Basque Country in the same period amounted to €3,520m, and were mainly in areas of undevolved powers such as the seaports of Adif, Bilbao and Pasaia, the airports (AENA), etc. In the period 2000-2009 a net amount of €12,438.27m was transferred to the state coffers for Social Security. To all this must be added costs generated by the interests on the sovereign debt of the Spanish state, plus the debts run up by the autonomous communities that are run by the 67 Spanish political parties, PP and PSOE, which have a negative effect on the state's contribution. Apart from all this, as Anton Borja points out, between 1993 and 2008 Basque capital invested €51,000m abroad, while the sum of foreign investments in Euskal Herria was €12,000m. As Jurado says, the problem is not the availability of capital for productive investments but the fact that this capital is exported at the expense of the development of our own productive fabric. Hence the southern Basque Country's problem is not its competitivity to attract foreign investors, but rather persuading capital already here to stay put. BEYOND THE FIGURES: STRENGTHS AND WEAKNESSES IN BASQUE STATE BUILDINGBUILDINGBUILDING The following chapters also make a useful contribution to identifying the existing strengths and weaknesses in Basque state building, which can be summed up as follows: Our wOur weaknessesweaknesseseaknesseseaknesses Competences and the autonomy strategy The system of powers or competences for southern Euskal Herria established in 1978 was not the fruit of a pact between equals, as Nekane Jurado points out. The present system establishes limits, classifying powers into the categories of exclusive competences of the Spanish state, shared competences, and exclusive competences of the autonomous communities — meaning, in our case, the Basque Autonomous Community and the Autonomous Community of Navarre, as defined by basic state legislation. There are no competences recognised for the area of the northern Basque Country [under French jurisdiction]. The Basque economic situation is being levelled with that of Spain by the duration of the economic crisis, the use that is being made by the Spanish state of basic legislation and the "autonomist" subordination strategy of Basque institutions; furthermore, this is largely responsible for an increase in the Basque contribution to the state's coffers, denying us the ability for political and economic maneouvre, and stopping us from finding our own rational, democratic way out of this crisis. De-structuring of the territory of Euskal Herria One of the main consequences of the lack of competences is the legal and political impossibility of drawing up a nationwide Basque political and socioeconomic project. Such an option is out of the question. Our territory is divided into two autonomous communities on the Spanish sie, while the north of Euskal Herria has no institutions of its own; as a result, we cannot conduct coordinated policies to address economic planning, which amounts to a great weakness at the present time. Management of the present economic crisis The fact that we lack powers to manage our own resources has many negative implications for our economy and social structure, as Anton Borja points out, quite apart from the money lost through taxation and funds transferred to the Spanish state: the Basque agricultural sector is collapsing, industrial production is at a standstill, many small retail outlets are closing down, and the policy of cutbacks is bringing the economy to a halt and fuelling unemployment and social alienation, thus reducing domestic demand.