The drain in Spain: the country's arts crisis

prado madrid spain arts
A man inspects Renaissance portraits at the Prado, Madrid. Photograph: AFP/Getty Images Afp/AFP/Getty Images

'Spain is different," the tourist board once touted. It is also complicated. Although a lot of energy, confidence and black money swirled around the Spanish art world over the past quarter of a century, today something is wrong. However lively Madrid or Barcelona might look, and a visit to any regional city greets you with a spanking new public art gallery, something is missing. For all the late dinners and cocaine nights, gleaming museums and prestigious international shows, there is an air of crisis.

"The party's over," Manuel Borja-Villel, director of the Reina Sofía museum in Madrid told me. Previously director of Macba (Museu d'Art Contemporani de Barcelona), Borja-Villel is Spain's most influential museum director. He sees the current economic crisis as an opportunity, even if it is an unwelcome one. There is talk of cuts of up to 50% in the arts. How can art institutions compete with hospitals and education, whatever the talk of the necessity of culture?

From the 1980s until recently, new museums by big-name architects opened all over Spain. Private foundations opened their doors and savings banks formed international art collections, setting up cultural centres as part of their social remit. As I write, I am installing a show for a cultural centre run by the Caja Madrid bank. Around the corner, queues line up for the Prado museum, for the Thyssen-Bornemisza Collection and for the Reina Sofía, Spain's largest and liveliest museum of contemporary art, which opened in 1990. Private galleries flourish – and sometimes struggle – in the small streets behind the museums.

Spanish institutions have always been prey to changes in government, with money and museum directors coming and going whenever political change happens at national, regional and even municipal levels. By achieving greater autonomy, the Prado has extricated itself from this damaging cycle, and the Reina Sofía is set to follow. The two museums now have a far more fruitful collaborative dialogue than the Tate and National galleries in London have ever had, co-ordinating exhibitions and lending works to each other. Regional and smaller Spanish institutions are less protected.

In the early 1980s, the Iberian peninsula felt far from the centre of the arts world, and both Spain and Portugal put a great deal of effort into building new artistic institutions. "We used to think that media attention and crowds coming through the doors was the signal to success and social usefulness," says Borja-Villel. "We mistook our place in the world. We imagined we had centrality. But we were never the centre. Spanish art institutions and artists were like good, diligent students. We didn't realise that there is no centre any more."

But the real problem is a deeper one. Art itself, the only real indicator of cultural vitality, has somehow lagged behind. Going round shows here for over a quarter of a century, I keep thinking it should be better. Why is painting so lousy here? Why is so much meek and secondhand? Of course there are always exceptions, but you often have to leave Spain to find them.

Which partly explains why so many of the best Spanish artists have always left – not just to escape the former dictatorship. Ambitious artists of the post-Franco period, such as Juan Muñoz and Pepe Espaliú, moved to London, Paris, New York. Turner prize contender Angela de la Cruz took off in the mid-1990s. Ambitious young artists still leave. "Everyone should, at some point," said Borja-Villel.

Paloma Polo, still in her 20s, escaped a conservative, moribund university art school in Madrid as soon as she could. "It was like a handicrafts school," she told me from Amsterdam, where she now lives. "There is no real scene of young artists in Madrid," she added, paradoxically putting part of the blame on the grants and prizes young artists have been given. "They get big-headed, even though in the end they're unambitious to be anything more than local artists. No one outside Spain knows or cares about them. I knew from day one I had to leave."

A mountain range of the mind

Unlike the UK, there are few alternative spaces, warehouse shows or ad hoc events in Spain. Those that take place are treated with suspicion. The sense of collaboration, which had certainly existed in the heady days of the 1980s, when I started coming here, did not last long. The sense of being part of a larger art world is somehow still stalled by the Pyrenees, though it is a mountain range of the mind.

Spain has few serious collectors, and those who only began collecting a few years ago are giving up. They're broke, Catalan artist Ignasi Aballí told me. Aballí is surviving the downturn. He's showing everywhere from São Paulo to Ikon in Birmingham. "The only way to survive is to show outside Spain," he said. This was true of artists like Muñoz, too, who died in 2001. He lived and worked near Madrid, but developed his career outside Spain.

The economic downturn is making everyone reassess the place of visual art in Spanish culture. Projects both modest and grandiose are floundering. La Caixa, a Catalan savings bank, has recently donated its collection to Macba. The future of another new project, the Canòdrom contemporary arts centre, still being built on a neighbourhood dog track in Barcelona, is stalled. An overblown new "city of culture", designed by architect Peter Eisenman on the outskirts of Santiago de Compostela in Galicia, eats millions of regional euros and looks unlikely to be completed anytime soon. Cities and regions look for the miraculous "Bilbao effect", the kind of urban and regional regeneration bought about by Frank Gehry's Guggenheim museum in that city, but it is an elusive panacea.

Elsewhere in Galicia, Marco (Museo de Arte Contemporáneo), housed in Vigo's old panopticon prison, is having problems. They're soon mounting Spain's first show of Scottish artist Martin Creed, but the programme is slowing down. "[To us], 100,000 fewer euros is the same as a €1m cut for a bigger institution," Marco's director Iñaki Martinez, told me.

Martinez was also recently appointed president of Spain's Association of Directors of Contemporary Art. "Artists are the ones who are suffering most," he said. "The first thing that is revised is the acquisitions policy. Many public Spanish collections have been blocked, others have reduced their capacity to develop and build their collections. No one knows for certain what is going to happen next with regards to the cultural activity of the savings banks. There are a number of foundations dedicated to the work of single artists that are questioning their continuity." Chillida-leku, the foundation dedicated to the legacy of Basque sculptor Eduardo Chillida, in the Basque region, has recently closed.

"Spain has rushed to create a cultural infrastructure which previously did not exist," says Martinez. "In many cases it was carried out without planning, giving priority to the container, not the content, and now we do not know what to do with all these buildings. The current situation simply demonstrates the result of the politics of waste and showbusiness."

Borja-Villel remains optimistic. "Smaller institutions need to find their own identity," he says. He sees the development of a sense of real communality as a solution. "The question is how to use these spaces in a different way. We cannot be alone any more, we are living through a change in history, and must not be afraid to make mistakes." Better questions and better mistakes would seem to be the answer.

Spain's five hottest artists

Ignasi Aballí (Barcelona, 1958) is an heir to the spirit of conceptualism. Signature works include listings made up of newspaper cuttings and his explorations around colour.

Dora García (Valladolid, 1966) will represent Spain in the Venice Bienniale. Her work has a complex performative dimension originating in her interests in literature and the conflict between reality and fiction

Lara Almarcegui (Zaragoza, 1972, pictured) investigates the relation between nature and urban landscape. She recently weighed and recorded the open spaces of different cities.

David Bestué (Barcelona, 1980) and Marc Vives (Barcelona, 1978) are a good example of how the young generations look at the art of the 60s and 70s from an ironic perspective. Their sardonic approach has strong echoes of Dada.

Paloma Polo (Madrid, 1983) has a profound interest in the cinematic. Her latest work evolves around the subject of light as a metaphor for the emergence of knowledge in the modern era.

Javier Hontoria, art critic of El Cultural;