Home The Washington Diplomat September 2019 Ex-Envoy Reflects on Economic, Political and Security Importance of U.S. Embassies

Ex-Envoy Reflects on Economic, Political and Security Importance of U.S. Embassies

Ex-Envoy Reflects on Economic, Political and Security Importance of U.S. Embassies

In January 2009, Alan Solomont received a telephone call. As his wife, Susan Lewis Solomont, recounts in her memoir “Lost and Found In Spain: Tales of An Ambassador’s Wife,” it was a call punctuated by “yes,” “no” and “of course.”

Solomont, a lifelong political and social activist who is now the dean of the Jonathan M. Tisch College of Civic Life at Tufts University in Medford, Mass., was being asked to serve as newly elected President Barack Obama’s ambassador to Spain and Andorra.

In Solomont’s view, Obama’s foreign policy was guided by the principle that the problems of the world today are too big to be solved by America alone, but no big problem can be solved without America.

To that end, Solomont’s work as ambassador to Spain touched on some of the most high-pressure issues that the Obama administration faced in its first four years.

Solomont actively encouraged the Spanish government to stay the course in Afghanistan. He also urged the Spanish to join the European Union’s 2012 embargo on Iranian oil, a precursor to later negotiations with Iran over its nuclear program.

Solomont was also involved in discussions with Madrid to allow the U.S. Navy to place four Aegis class destroyers at Spain’s Naval Station Rota, where they patrolled the Mediterranean as part of NATO’s missile defense program as tensions between the alliance and Russia steadily increased.

But by far the most urgent problem Solomont tackled was the global recession that had begun in 2008. As ambassador from December 2009 to August 2013, Solomont served in Madrid through the deepest depths of the recession, when U.S. and EU leaders feared that the so-called “PIIGS” countries — Portugal, Italy, Ireland, Greece and Spain — could tumble into total economic collapse.


Pulling Spain Back from the Brink

Spain had had its own real estate bubble, driven by a construction boom from the late 1990s into the 2000s, not unlike the real estate bubble that triggered America’s own recession.

“Spain was teetering on the edge of insolvency. If they had gone under, they were too big to fail. That would have pulled Europe under, and that would have really impacted our economic recovery,” he said as The Diplomat sat down with him in Medford.

He arrived in Madrid during the first quarter of contraction in the second “dip” of the so-called “double-dip” recession, part of the 2007-08 global financial contagion. He left Spain during the first quarter of growth, just as the economic calamity began to ease.

a1.powi.solomont.spain.protestors.storySolomont worked with the Spanish government to address the recession by encouraging trade with the U.S. as one way for Spain to pull itself back from the brink.

Exports account for about 30 percent of Spain’s GDP. Even though the country’s domestic consumption plummeted during the global recession, Spanish companies were still selling their products abroad.

“That really was one of the strengths that kept the Spanish economy afloat,” Solomont said. “The other was tourism business,” which currently accounts for about 14 percent of Spain’s GDP.

Solomont also pointed to the U.S. as an example of what to do right in a recession, given that the U.S. had finally started to see growth while Spain continued to struggle.

The Spanish government was borrowing heavily to maintain unemployment benefits and government services, and because Spain is a member of the eurozone, it could not devalue its currency like the U.S. Federal Reserve could — a major handicap that prevented other troubled eurozone countries from devaluing their currency in a bid to boost exports.

Solomont said the U.S. continuously pushed Spain to cut back on costly pension payments and reduce government spending because the U.S. had had to do the same to pull itself out of recession. Indeed, Spain relied heavily on austerity measures during this period to meet the deficit limits set by the EU.

If Spain’s economy continued to spiral, the U.S. was concerned that a bailout for the country “was more than the EU could afford,” Solomont said.

JPMorgan Chase estimated at the time that a bailout for Spain would have cost $350 billion to $450 billion. According to Solomont, internal estimates at the time placed the cost much higher, at nearly four times the €289 billion the EU and the International Monetary Fund spent to stabilize the Greek economy. 

Eventually, the EU offered Spain €100 billion to rescue its banks, but the country only wound up using €41 billion. Mariano Rajoy, then Spain’s prime minister, emphasized at the time that the bailout funds did not come with additional austerity conditions on Spain’s economy, unlike the bailout delivered to Greece. 

But the Spaniards did have to swallow a raft of harsh austerity measures, the effects of which bred resentment against the political establishment.

Since the recession, Spain has held three general elections in four years, from 2015 to 2019, as successive vote-winners in the Spanish Parliament failed to form coalition governments.

“The political storm clouds were apparent as Spain was dealing with the economic crisis. You could tell that they were going to face a political crisis that might be just as challenging as the economic crisis,” Solomont said. “People were angry with the government and angry that they didn’t fix the economy sooner.”

Prime Minister Rajoy of the conservative People’s Party bore the brunt of that anger. While unemployment dropped and economic growth returned in the second half of Rajoy’s tenure from 2011 to 2018, the prime minister implemented austerity measures such as cutting the salaries of public workers that were highly unpopular.

The economic crash also revealed that the construction boom preceding it had “fostered a great deal of corruption,” Solomont said, “and the political leaders just wouldn’t deal with it.”

a1.powi.solomont.spain.honor.storyMeanwhile, long-running tensions with the prosperous, semi-autonomous region of Catalonia exploded when Catalonians voted for independence in an October 2017 referendum that was deemed unconstitutional by Madrid. Numerous separatist Catalonian politicians have since been put on trial or gone into exile.

Dogged by the stalemate over Catalonia, a litany of corruption scandals and lingering frustrations over the economy, Rajoy was ousted from office in June 2018 and Pedro Sánchez of the Socialist Party took power on a pledge to bolster social spending and launch a dialogue with Catalonian separatists.

Despite winning a snap election in April, Sánchez’s Socialists have failed to cobble together a governing coalition. If he’s unable to form a coalition by Sept. 23, Spain will head to the polls again in November — its fourth election in just four years.

Further dividing an already polarized political landscape is the emergence of a far-right party, Vox, which won 10 percent of the most recent vote on an anti-immigration, ultra-nationalist platform. 

Adding to the government’s woes is the fact that Spain’s economic recovery seems to be backtracking. The country’s economy has grown every year since 2013 and the unemployment rate fell to a 10-year low in October. But recently, Spain’s unemployment rate climbed to nearly 15 percent, its largest quarter-on-quarter increase in six years.

U.S. Investment in Diplomacy

Solomont said the Obama administration recognized that it was imperative to help Spain, and Europe as a whole, weather the recession because the U.S. risked sliding back into its own recession if the EU countries — which together rank as the number-one export market for the U.S. — failed to recover.

But the current Trump administration views the EU as a trade adversary, not ally.

For Solomont, however, trade doesn’t have to be a zero-sum game. As ambassador, he described himself as “America’s salesman-in-chief” in Spain, with the goal of benefiting American companies and, ultimately, creating American jobs.

“We worked on U.S. exports, making sure that U.S. products were selling in Spain, from sorghum [grain] that farmers were producing in Nebraska, to Tiffany jewelry that we’re selling on the fancy shopping street Serrano in Madrid,” Solomont explained.

He was also active in trying to attract Spanish investment in the U.S. According to Solomont, 19 percent of all U.S. exports are manufactured by the American subsidiaries of foreign-owned companies.

“The largest automobile insurer in Massachusetts is a Spanish company. The largest bank still headquartered in Massachusetts is Santander Bank, a Spanish bank. Spanish infrastructure companies are building roads and highways and subways,” he said, adding that all of this foreign investment is critical to our economy.

On that note, he gave a full-throated defense of the work that U.S. diplomats do that average Americans may not be aware of — not only to promote U.S. economic interests, but to keep the country safe as well.

“It’s U.S. embassies that keep bad guys out from coming to the United States. It’s U.S. embassies that inspect ships that are carrying cargo to the U.S. to make sure they’re not carrying drugs or bombs. It’s the U.S. embassy [in Madrid] that looks after the 25,000 American students who study in Spain every year. And we’re hollowing all of that out,” Solomont lamented.

“I’m not sure even Washington understands, or even the White House understands, the value of our embassies to both our prosperity and our security,” Solomont said.

This lack of understanding is particularly acute under the Trump administration, which has left dozens of top-level State Department posts unfilled and proposed drastic cuts to the foreign affairs budget, which totals about 1 percent of all federal spending.

But decades of disinvestment in diplomacy “didn’t start with this president,” Solomont said.

While both Republicans and Democrats in Congress have repeatedly thwarted Trump’s proposed State Department budget cuts, U.S. policymakers have long relegated diplomacy to the sidelines while beefing up military resources.

“It didn’t start just now, but it’s never been this bad,” Solomont said.a1.powi.solomont.spain.parliament.story

Championing Civics

The current toxic political environment in part explains Solomont’s most recent career move: the study of civics. After returning home from his service in Madrid, Solomont was named dean of the Jonathan M. Tisch College of Civic Life at Tufts University in Massachusetts.

It was a natural progression for someone with a lifelong passion for civic engagement.

In 2000, President Bill Clinton appointed Solomont to the bipartisan board of directors of the Corporation for National and Community Service, the federal agency that oversees all domestic service programs, including AmeriCorps, Learn and Serve America, VISTA and Senior Corps. He was re-appointed by President George W. Bush in 2007 and elected chair in 2009.

Solomont has been a major Democratic donor for decades and was an early supporter of Obama during his run for the presidency. In a way, Solomont’s political career culminated where it began: He was a young page at the 1968 Democratic National Convention in Chicago, where he witnessed police clash with protesters; 40 years later, he stood in Chicago’s Grant Park to watch Obama deliver his election night victory speech as the president-elect.

a1.powi.solomont.spain.barcelona.storyObama chose Solomont to serve as a non-career ambassador to Spain. Such political appointees, who regularly make up about one-third of U.S. ambassadorships abroad, are largely chosen over career Foreign Service officers because of their personal connections and political donations to the president.

Most, like Solomont, come from business backgrounds. Solomont spent much of his career in health care after receiving a degree in nursing (his mother was a nurse at Boston City Hospital). He built a network of elder-care facilities in New England as chair of Solomont Bailis Ventures, and he invested in early-stage health care companies. Solomont was also the founder and managing director of Angel Healthcare Investors, in addition to co-founding HouseWorks, a home-care company that helps seniors remain independent.

However, unlike some non-career ambassadors who have never visited the countries to which they are posted, Solomont had studied in Spain on a Thomas J. Watson Fellowship for postgraduate study and travel abroad after graduating from Tufts University with a bachelor’s in political science and urban studies.

He admits that the bipartisan American tradition of naming of non-career ambassadors is “an unusual practice,” especially compared to European foreign ministries, where ambassadors are long-time civil servants promoted internally. Such political appointees are often criticized for being large campaign bundlers who are rewarded with plum diplomatic postings for which they are ill-prepared. Others, however, say political appointees can bring useful business skills to the job.

Solomont also notes that non-career ambassadors bring other qualities to the job that career diplomats may not have: “relationships with the president, relationships inside the White House, nongovernment experience, careers in the private sector, or maybe careers in the academic sector.”

Solomont referred to these ambassadors as “citizen diplomats” called on to serve the country because of the unique skills and networks they have, which he believes can be just as valuable as a diplomatic career in achieving the goals of U.S. diplomacy.

It is also a strength of the U.S. political system, Solomont said, to have “people who come in from the private sector into government, who run for office — senators, congressmen or [others] in public service — and that doesn’t happen in Europe.”

Private sector experience brings creativity and innovation to government, Solomont argued. “I’ve always believed citizens have a responsibility to participate in civic life.”

This participation is one aspect of the U.S. democratic system that makes it “healthy,” he said, and this is at the heart of his more recent work as dean of the Tisch College of Civic Life.

“It is a great tradition of our democracy that we depend upon citizen participation in our communities and our government, that we depend upon civic institutions,” he told us.

One of the goals of the Tisch College of Civic Life is to “figure out what’s gone wrong with our civic institutions,” Solomont explained. “The strength of our democracy rests on strong civic institutions that are vehicles for people to participate in our democracy and to learn the skills of participating in democracy.”

Social media and other modern technologies present challenges to this participation in Solomont’s view.

“We really haven’t done a good job at figuring out what kinds of civic institutions we need in the 21st century — how we’re going to adapt to media, how we’re going to adapt to the way people get their information, what are we going to do to replace the kind of institutions that taught people, how are we going to revive the teaching of civics in schools?”

In his testimony before the Senate Foreign Relations Committee at his confirmation hearing, Solomont spoke about this belief when he said, “This is an auspicious time in our nation’s history. The president and the Congress have challenged American citizens to roll up their sleeves to help solve the problems of their communities, of our nation and of the world. I come before you as one of those citizens; nothing more but nothing less.”

This reflected the Obama administration’s philosophy, Solomont said, which carried all the way through to Obama’s farewell address when he said that “we all share the same proud title: citizen.”

“That’s really something that our culture needs to hang on to and revive,” Solomont said.

About the Author

Ryan R. Migeed (@RyanMigeed) is a contributing writer for The Washington Diplomat..