Whatever happened to Spain's disastrous 2012 bank bailout under Rajoy
Almost nothing has been recovered from the 2012 bailout: taxpayers are still owed 60 billion euros. But the money did not go to the banks, rather to the politically run public savings banks.
English · Original discussion in Spanish · Published
The bailout that never reached the banks: 60 billion lost in politically run savings banks
The article from merca2.es circulating these days is devastating: almost nothing has been recovered from the 2012 financial bailout, and the state still owes around 60 billion euros. But the most revealing fact is not the figure itself, but who the rescue actually went to: not the big private banks, but publicly owned savings banks run by politicians of every stripe.
A convenient confusion has tried to portray the operation as a bailout of the private banking sector, when practically all the money went to institutions like Caja Madrid, whose board included figures such as Pedro Sánchez alongside PP politicians. Captured by the political parties, the savings banks granted loans to unviable projects that no private institution would have financed. When the bubble burst, the net taxpayer had to pay for the party.
Who footed the bill?
The figures leave no room for doubt: the bailout was structured entity by entity, avoiding the sovereign bailout that Greece, Portugal or Ireland suffered. That, according to some analyses, was the only merit of Rajoy's government: preventing the troika from imposing cuts to rights and services. But the cost was immense: public money diverted from education and healthcare to clean up the balance sheets of savings banks wrecked by political mismanagement.
The debate over whether the bailout was necessary remains open. Defenders of the intervention point out that without it, the Spanish financial system would have collapsed, dragging the country down with it. Critics reply that it was a bailout of politicians turned bankers, who were never held accountable. The truth is that, thirteen years on, the debt is still alive.
The lesson nobody learned
What is most serious is that the same model of political management of financial institutions has been repeated in other areas, always with the same result: losses that end up being paid by taxpayers. The argument that "there was no alternative" resurfaces cyclically, but the question that remains unanswered is why the institutional design allowed politicians with no technical expertise to run the savings of millions of Spaniards.
The 60 billion debt is still there, like a ghost no government wants to acknowledge. Meanwhile, the debate over who was really responsible fades into political noise. The figure is stubborn: nothing has been recovered.
Related discussions in the forum
The article from merca2.es circulating these days is devastating: almost nothing has been recovered from the 2012 financial bailout, and the state still owes around 60 billion euros. But the most revealing fact is not the figure itself, but who the rescue actually went to: not the big private banks, but publicly owned savings banks run by politicians of every stripe.
A convenient confusion has tried to portray the operation as a bailout of the private banking sector, when practically all the money went to institutions like Caja Madrid, whose board included figures such as Pedro Sánchez alongside PP politicians. Captured by the political parties, the savings banks granted loans to unviable projects that no private institution would have financed. When the bubble burst, the net taxpayer had to pay for the party.
Who footed the bill?
The figures leave no room for doubt: the bailout was structured entity by entity, avoiding the sovereign bailout that Greece, Portugal or Ireland suffered. That, according to some analyses, was the only merit of Rajoy's government: preventing the troika from imposing cuts to rights and services. But the cost was immense: public money diverted from education and healthcare to clean up the balance sheets of savings banks wrecked by political mismanagement.
The debate over whether the bailout was necessary remains open. Defenders of the intervention point out that without it, the Spanish financial system would have collapsed, dragging the country down with it. Critics reply that it was a bailout of politicians turned bankers, who were never held accountable. The truth is that, thirteen years on, the debt is still alive.
The lesson nobody learned
What is most serious is that the same model of political management of financial institutions has been repeated in other areas, always with the same result: losses that end up being paid by taxpayers. The argument that "there was no alternative" resurfaces cyclically, but the question that remains unanswered is why the institutional design allowed politicians with no technical expertise to run the savings of millions of Spaniards.
The 60 billion debt is still there, like a ghost no government wants to acknowledge. Meanwhile, the debate over who was really responsible fades into political noise. The figure is stubborn: nothing has been recovered.
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Summary of a discussion on Burbuja.info - Foro de economía, actualidad y política., translated from Spanish and reviewed before publication. Read the full discussion (6 replies).
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