If you could peer into the very centre of the converging economic forces tearing at the fabric of Europe, you would find a small, politely bewildered man named Jaime Cadena.
This week, Spanish Prime Minister José Luis Rodríguez Zapatero became the latest European leader to announce huge cuts to government departments and programs in order to save his country from becoming another bankrupt victim of the continent's debt crisis. At the same time, Mr. Cadena discovered his own personal place in that crisis.
The 44-year-old construction worker sat at the folding table in the tiny living room of his basement apartment on the outskirts of Barcelona and tried to grasp the larger meaning of a letter from the bank informing him he no longer owned the property.
The apartment will be auctioned at a fraction of the price he'd paid for it four years ago, when his fast-rising salary seemed a sure ticket to middle-class stability for his family. If a buyer is found this week, he and his four teenaged children will be evicted. As Spain has no personal-bankruptcy law, he will still owe the bank almost €200,000 - more than the current market value of the apartment - even if he loses it.
"It's like a terrible weight I'm forced to carry," Mr. Cadena says. "I feel like the whole country's problems have fallen on my back."
With an unemployment rate of nearly 20 per cent, the highest in Europe, it could be a long time before he finds more than the occasional month-long construction job. But the spending cuts launched by Mr. Zapatero this week will likely lead to reductions in the welfare and unemployment-insurance programs that were Mr. Cadena's only hope of staying aloft until jobs materialize again.
Mr. Cadena's family are part of an estimated 1.4 million Spaniards now facing court action over unpaid mortgages. During the late 1990s and 2000s, a freewheeling mortgage market gave Spain the highest rate of homeownership in Europe and possibly in the Western world, at 85 per cent. But property values quickly collapsed across Spain - falling more than 40 per cent in Barcelona - at the same time as 2.5 million jobs were wiped out, so there are now a million Spanish families in which all the members are unemployed.
In economic terms, Spain's simultaneous property-bubble collapse and debt crisis mean the country will face years of adjustment to a lower living standard and a less generous government. Given the country's comparatively strong underlying economy, it does not face a Greek-style lender panic, but it will likely be more than a decade before its economy returns to its previous levels.
The new Europe
In human terms, it means millions of Europeans who had been given a foothold in the middle-class world of property ownership, secure employment and university education have now been plunged into lives of rented rooms, paltry minimum-wage jobs and dependency on an increasingly feeble state. Many face huge burdens of debt.
Map: Financial data by country
While it now seems likely the euro currency will remain intact after Germany and France acted to secure the debt of their faltering neighbours, and most economies will recover, there is a widespread sense this year's harsh austerity measures will mark the end of "the social Europe": the continent's systems of social safety nets, job-security guarantees and early-retirement protections that made middle-class life sustainable for those able to enter it.
In Spain, the government this week asked the people to share a major national sacrifice in order to prevent a disastrous future.
"I want to tell you that this is a transcendental moment for Spain, a crucial moment for its immediate future and for the coming decades," Mr. Zapatero told parliament on Wednesday. "We need to adopt measures to reduce the impact on our economy of the worst crisis we have known, and at the same time we need to drive forward the most intense economic transformation of our country in recent times."
Across Europe, governments are preparing enormous cutbacks. In Britain, Prime Minister David Cameron this month asked ministers to draw up plans for a 40 per cent cut in every department. Italy this week passed a budget cutting €25-billion over two years, and Ireland was warned by the International Monetary Fund that its brutal slashing may not be enough to keep debt in check.
But the relatively manageable fiscal crisis in many European countries - Spain's debt situation, like Britain's, is roughly comparable to the one faced by Canada in the early 1990s - is disguising a far more dire human situation that leaves millions of Europeans fearing for their future.Report Typo/Error