At a convenience store just off of Madrid's Plaza Mayor this pastweekend, a customer paid for a sixpack with his debit card. Notingthe name of the bank on the card, cashier Juanjo Martínezcouldn't resist a joke. "Sure you don't want to buy anything else?"he asked. "Might as well use it while you still can." The humor in Spain has been dark ever since the crisis began fouryears ago.
But in recent weeks, and especially in the past fewdays, the mood has turned decidedly blacker. On May 25, Bankia, thecountry's fourth largest bank, admitted that it needed a totalinfusion of 23 billion euros in public funds to avoid bankruptcy.That same day, and every weekday since, the spread between Spain's10-year government bonds and their German counterparts has remainedabove the critical red line of 500, beyond which it becomes nearlyimpossible for a country to finance its debt. Gradually, thegallows humor is giving way to outrage. (PHOTOS: The New Castles of Spain: Victims of the Euro Crisis) It's hard to say who is the bigger target of it: Spain's governmentor its banks.
They are, in any case, inextricably linked. It wasthe government, after all — then led by the Socialist party— that created Bankia in December 2010 by merging sevensavings banks on the verge of default in the hopes that a largerentity would be better able to withstand the toxic assets plaguingSpain's lenders. At its head was Rodrigo Rato, former IMF chief,and a high-ranking member of the center-right Popular Party, whichwon Spain's national elections elections the following year. On May7, Rato abruptly resigned that position and his replacementrequested that the government partially nationalize the bank.
Twoweeks later, Bankia admitted that, contrary to a February reportthat recorded 305 million in profits, it had in fact lost nearly 3billion euros in 2011. On May 25, the bank's advisory boardresigned en masse, though not before requesting an additional 19million euros from the government — an amount which thegovernment, despite promises not to spend public money bailing outbanks, agreed to supply. Three days later, Bankia's parent company,BFA, announced that it too was 3.3 billion in the hole — thelargest loss in Spain's history. The ridiculousness of the situation — it's hard to say whetherits worse to believe that a bank led by the former head of the IMFdeliberately lied to its shareholders or that it simply couldn'tkeep its profits and losses straight — has provided plenty ofcomedic fodder.
"Government To Hand Over 700 Virgins to Bankia" ranthe headline of a story in the satiric newspaper Rokambol , in reference to to prime minister Mariano Rajoy's willingness tomeet the astonishing demands of the bank. One blog recently beganoffering a special edition Playmobil Bankia toy, with the promisethat it would give kids the chance to "discover the only bank inthe world where the robber sits behind the counter!" Price tag? 20billion euros, of course. (PHOTOS: Police and Protesters Clash in Spain) Beneath the humor lies no small amount of anxiety. Ten millionSpaniards have accounts with Bankia, and another 400,000 haveinvested in its stocks.
Mari Montoyo is one of the former, and sheadmits that she worries constantly about her funds. "I wake upevery morning and wonder if I should empty out my account," the47-year-old housewife says. "Maybe it would be safer hidden in adrawer at home." Medium Miguel Morales, who has been tellingfortunes for over 30 years, says he is seeing a lot of that kind ofdoubt. "I used to get very few people seeking financial advice," hesays.
"But right now I'd say about half my clients ask if theyshould keep their money in one bank, or invest in another." Until now, even as the unemployment rate has passed 23% andausterity measures have reduced pensions, made it easier to fireemployees, and cut social welfare benefits, Spain has largelyavoided the kind of rage that has exploded on the streets ofGreece. But there are signs that that may be changing. "I thinkthis is the straw that breaks the camel's back," says IgnacioEscolar, former editor of Politico newspaper and creator of one of Spain's most popular politicalblogs, Escolar.net. "The government is going to inject more thantwice the amount of public money it has cut from education andhealthcare into a bank. We have no money to pay teachers, but wehave money to pay Bankia.
If you look on social media, it'ssparking a lot of anger." (MORE: The Vanguard of Disaster) There was perhaps no more potent sign of that anger than KarlosAnguiñano's outburst on television last week. As thenormally jovial chef on Spain's most popular cooking show choppedvegetables for a sofrito last week, he began to describe hisdistress at recent cuts to education. From there, it was a shortleap to the bankers. "We've all been affected by this crisis,"Arguiñano said.
"But we're feeling it not because ofteachers or students. We're feeling it because of those gangsters— those bankers who are running the crisis." Spurring the growing rage is the sense that the government ismaking it up as it goes along. Certain promises — like itwould not raise the Value Added Tax, or create a "bad bank" intowhich others could offload their toxic assets — have beendiscarded in the face of necessity. "What the prime minister saystoday, he may well discard tomorrow," said Iñaki Gabilondo,Spain's most prominent television journalist in a broadcase on May29th.
"Not just because he keeps contradicting himself. But becauseyou can see that he is completely overwhelmed by what ishappening." (MORE: Obama's European Stimulus Challenge) The day before, Rajoy had tried to be firm. Holding his first pressconference since his inauguration in January, the prime ministeranswered a journalist's question about a possible rescue fromEurope with what may well turn out to be his "Read my lips" moment:"There will be no bailout. Next question?" But he also refused tohold a public investigation into what and who is responsible forBankia's default, and in the process, only spurred more resentment."As a journalist, I know that there's not much alternative tosaving Bankia with public money, says Escolar.
"But for them to doit without any transparency or explanation is deeply troubling.They're treating it as if it were a hurricane — a naturaldisaster that no one could control and for which no one isresponsible." On May 29th, as the spread remained above 500 points and BFAconfessed that it held 40 billion in toxic assets, Twitter lit upwith the news that one of Bankia's directors had received a 14million euro severance payment. "They're all a bunch of shamelessthieves," said Monica Besado, 21, as she stopped by herneighborhood branch of Caja Madrid, one of savings banks that makesup Bankia. "I would take all my money out, but I don't think anyoneelse is any better. Unless you want to leave Spain, there's noplace else to go." MORE: Spanish Banking Troubles Keep Markets on Edge. I am an expert from Leather Production Machinery Parts, usually analyzes all kind of industries situation, such as microsoft trackball mouse , long nose plier.
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