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Source: http://www.theguardian.com/world/2014/apr/01/madrid-spain-tourism-debt-cuts
Madrid suffers crisis of confidence
as debt and unemployment hit home
Spain's big-spending capital has struggled to draw visitors
as tourists prefer the attractions of Barcelona, Ibiza and
Bilbao
Madrid's Cuatro Torres have come to symbolise the city's extravagant spending. Photograph: Alamy
The people of Madrid are feeling dejected . Gloom has soured their once
irrepressible vitality. It has been like this for more than five years, ever since the
property bubble burst. The conservative city council, which has been in power
for 25 years, lavishly invested public funds in the hope of making Spain's
political capital the economic equal of Barcelona. The subsequent crash
prompted a major identity crisis. "Madrid is no longer the lively, joyful city we
knew. It's sad and tired," said Marcela San Martin, 46, programme manager at
the Sala Sol concert hall which opened in 1979, in the heyday of the Movida
Madrileña, the cultural explosion that erupted when Franco's gerontocracy gave
way to a new democratic generation.
It all seems very remote 35 years on. "The crisis is not the only factor," says
Kike Sarasola, joint founder of the trendy Room Mate hotel chain. "I adore my
city but it's stagnant ... It used to be the most amusing place in the world, but
now they've banned everything, forcing terraces to close at midnight during the
week. It's a bore for visitors. They'd rather go to Bilbao, Málaga, Barcelona or
Ibiza."
Holidaymakers have flocked to Spanish beaches, partly due to the Arab spring,
but Madrid has lost 400,000 foreign tourists in the past three years. Their
number dropped by 7% in 2013, in large part due to the slump in business
tourism. Terminal 4 at Madrid-Barajas airport is a disaster zone. The huge
structure, which opened in 2006 at a cost of €6bn ($8.3bn), lost 5.5 million
passengers in 2013, down 12% on 2012. Overall traffic has dropped by
23% since 2007, with low-cost operators much preferring Barcelona.
In many respects Madrid seems empty. The crowds after dark and dense traffic
have vanished. The number of Metro passengers is down 13% on 2007.

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Business has fled the city centre and even the cultural life is flagging. The arts
were the first to be hit by public-spending cuts and lower living standards. "With
the higher rate of VAT on cultural goods [raised from 8% to 21% in 2012] and
the drop in audiences, it's increasingly hard to pay artists' fees and expenses,"
says San Martin. So Madrid misses out on international tours. Last year local
punters had to travel to Lisbon to see Prince and Paris for Bob Dylan. This year
Lady Gaga is only doing Barcelona.
Spanish artists are suffering too. "Things weren't that easy before the crunch,
but we could find venues and get paid properly," says jazz double bassist Baldo
Martínez. Now clubs only pay according to the size of the audience and there
are fewer concerts. Many people can no longer afford to pay €10 a week to
hear live music.
The arts community is extremely critical of the city council, under the leadership
of Ana Botella since 2011. "In 2012 an acoustic protection zone was
established in the centre. The police are always checking up on concert halls
and clubs," San Martin complains. Busking is under strict supervision too.
Even the flagship museums are having a hard time. Public funding for theReina
Sofía museum, home to Picasso's Guernica, has been almost halved since
2011. It has had to resort to all sorts of previously unheard of expedients –
finding sponsors among private companies, setting up an international
foundation to enlist the support of private collectors abroad, partnerships with
other museums – senior curator Manuel Borja-Villel explains.
All that remains of the exuberant boom years, "when arts policy was closely
connected to buildings and their content", as Borja-Villel puts it, are spectacular
but largely vacant structures. The Conde Duque arts centre, for instance,
organises a "kids' town" at Christmas and a summer music festival.
Other projects were never even built. The Cuatro Torres (four towers) are lined
up along La Castellana, a big avenue crossing the city. But behind them,
concealed by hoardings, is a huge empty space set aside for an international
congress centre. It has come to symbolise what has happened here in the past
15 years. "Madrid is the city in Spain which has borrowed the most, accounting
for a third of all local authority debt," says Noelia Martínez, a Socialist councillor.
"In 2013 service of the debt absorbed 30% of spending."
When Alberto Ruiz-Gallardón, justice minister, was elected mayor in 2003 the
capital saw things on a grand scale. It spent almost €4bn covering over the ring-
road. Extravagant sports facilities, such as the Caja Mágica, went up in the
hope of hosting the 2020 Olympics. Last September the city suffered a major
setback when the CEO of the Las Vegas Sands Corporation, Sheldon
Adelson, shelved plans to build a European casino complex in the Madrid
suburbs, dashing hopes of jobs and tax revenue.
Pedro Corral, the councillor tasked with the arts, sports and tourism, is still
upbeat. "We have a great project to become the city where it is easiest to start a
new business." The council has cut corporation tax, and is outsourcing services
while reining in spending. But though the labour market in Barcelona is
recovering, Madrid is still shedding jobs.