Skip to main content

Spain's youth asks: Why is there money for banks and not for us?

By Julio Embid, Special to CNN
updated 6:54 AM EDT, Tue June 5, 2012
Young Spainish people protest during a national strike in Madrid on March 29, 2012.
Young Spainish people protest during a national strike in Madrid on March 29, 2012.
STORY HIGHLIGHTS
  • Julio Embid: Spaniards want to know how much money Bankia needs
  • As Bankia sucks up financial aid Spaniards wait to hear news of welfare state cuts
  • People find it confusing that there is no money for healthcare, but enough to rescue banks
  • People will probably wait until summer is over to resume protests and strikes

Editor's note: Julio Embid is a political scientist and is a deputy director at the Laboratory of Fundación Alternativas.

(CNN) -- How big is the financial hole? This is the main question among Spaniards nowadays. They want to know how much money Bankia, the country's fourth-largest bank, needs.

Bankia was created in 2010, a result of the merger of seven small entities including Caja Madrid and Bancaja.

Such cajas -- regional savings banks with board members appointed by the local authorities -- devoted part of their profits to social purposes within their areas. They fell into enormous debt due to their investments in infrastructure, and thousands of houses which were never sold.

Bankia was a proposal of the ruling Popular Party (PP, conservatives). The idea was to merge the saving banks and give an executive role to Rodrigo Rato, the former managing director of the International Monetary Fund and first chairman of Bankia.

Before these posts, Rato was Minister of the Economy and Treasury in the first and second cabinet of Prime Minister Jose Maria Aznar, who led the country between 1996 and 2004.

Rato was idolized in the conservative media, and credited with the previous cycle of economic growth. All was running smoothly until May, when the current Minister of Economy, Luis de Guindos, forced Rato to resign as Bankia president while the CNMV (the Spanish agency for financial markets) suspended the stock exchange of Bankia when its price slumped to half its original value.

Spain: Too big to fail, too big to bail
Spain banking to blame for stock drop
Failing banks in Spain drag down economy
Bankia troubles put Spain on edge

Now, as Bankia sucks up financial aid, Spaniards wait to hear news of cuts to their welfare state.

Every Friday could be a Black Friday, because it's always Friday in Spain when cuts and bad news arrives at the cabinet meeting.

The government recently approved a €10 billion euro ($12 billion) cut in education and health programs, and will most likely announce it will spend €23 billion ($28 billion) to rescue Bankia.

So what do the people think?

According to the CIS, the public agency for surveys, Prime Minister Mariano Rajoy has gone from a rate of approval of 45% in January to 38% in May -- a significant drop considering he won the elections with an absolute majority only six months ago.

People, especially youth (for whom unemployment rates are above 51%), find it difficult to understand there is no money for healthcare or universities, but enough to go around when it comes to rescue banks or pay severance packages to bankers who have ruined their companies.

Up to now, no one has resigned empty handed.

But not everything is bad news for the government and its party. Their main competitor, the Socialist Party (PSOE, center-left), trails in the polls.

Although it has won two regional elections this Spring (Andalusia and Asturias), its leader Alfredo P. Rubalcaba generated "little" or "no" confidence among 78.8% of the Spaniards, according to the latest survey carried out by the CIS.

So what happens now? All the parties in opposition have asked the government to open an inquiry into the Bankia case. It is difficult to justify the billions in cost without knowing exactly what happened.

Meanwhile, summer is on the way. In Spain, this is the time when political life is paralyzed and tourism boosts job prospects, especially in the coastal towns.

Demonstrations, strikes and protests will probably be forgotten until September.

While transport prices and university fees rise, and the government increases taxes and lowers pensions, people prefer to stay at home and support La Roja (Spanish national soccer team) and wait until it is cooler to take the streets.

The opinions expressed in this commentary are solely those of Julio Embid.

ADVERTISEMENT
Part of complete coverage on
updated 4:06 PM EDT, Tue October 21, 2014
Timothy Stanley says Lewinsky is shamelessly playing the victim in her affair with Bill Clinton, humiliating Hillary Clinton again and aiding her critics
updated 9:02 PM EDT, Mon October 20, 2014
Imagine being rescued from modern slavery, only to be charged with a crime, writes John Sutter
updated 12:00 PM EDT, Tue October 21, 2014
Tidal flooding used to be a relatively rare occurrence along the East Coast. Not anymore, write Melanie Fitzpatrick and Erika Spanger-Siegfried.
updated 7:35 AM EDT, Tue October 21, 2014
Carol Costello says activists, writers, politicians have begun discussing their abortions. But will that new approach make a difference on an old battleground?
updated 9:12 AM EDT, Tue October 21, 2014
Sigrid Fry-Revere says the National Organ Transplant Act has caused more Americans to die waiting for an organ than died in both World Wars, Korea, Vietnam, Afghanistan and Iraq
updated 2:51 PM EDT, Tue October 21, 2014
Crystal Wright says racist remarks like those made by black Republican actress Stacey Dash do nothing to get blacks to join the GOP
updated 6:07 PM EDT, Tue October 21, 2014
Mel Robbins says by telling her story, Monica Lewinsky offers a lesson in confronting humiliating mistakes while keeping her head held high
updated 9:29 AM EDT, Mon October 20, 2014
Cornell Belcher says the story of the "tea party wave" in 2010 was bogus; it was an election determined by ebbing Democratic turnout
updated 4:12 PM EDT, Mon October 20, 2014
Les Abend says pilots want protocols, preparation and checklists for all contingencies; at the moment, controlling a deadly disease is out of their comfort zone
updated 11:36 PM EDT, Sun October 19, 2014
David Weinberger says an online controversy that snowballed from a misogynist attack by gamers into a culture war is a preview of the way news is handled in a world of hashtag-fueled scandal
updated 8:23 AM EDT, Mon October 20, 2014
Julian Zelizer says Paul Krugman makes some good points in his defense of President Obama but is premature in calling him one of the most successful presidents.
updated 10:21 PM EDT, Sun October 19, 2014
Conservatives can't bash and slash government and then suddenly act surprised if government isn't there when we need it, writes Sally Kohn
updated 8:05 AM EDT, Wed October 22, 2014
ISIS is looking to take over a good chunk of the Middle East -- if not the entire Muslim world, write Peter Bergen and Emily Schneider.
updated 9:00 AM EDT, Mon October 20, 2014
The world's response to Ebola is its own sort of tragedy, writes John Sutter
updated 4:33 PM EDT, Fri October 17, 2014
Hidden away in Russian orphanages are thousands of children with disabilities who aren't orphans, whose harmful treatment has long been hidden from public view, writes Andrea Mazzarino
updated 1:22 PM EDT, Sat October 18, 2014
When you hear "trick or treat" this year, think "nudge," writes John Bare
updated 12:42 AM EDT, Sat October 18, 2014
The more than 200 kidnapped Nigerian schoolgirls have become pawns in a larger drama, writes Richard Joseph.
updated 9:45 AM EDT, Fri October 17, 2014
Peggy Drexler said Amal Alamuddin was accused of buying into the patriarchy when she changed her name to Clooney. But that was her choice.
updated 4:43 PM EDT, Thu October 16, 2014
Ford Vox says the CDC's Thomas Frieden is a good man with a stellar resume who has shown he lacks the unique talents and vision needed to confront the Ebola crisis
updated 4:58 AM EDT, Sat October 18, 2014
How can such a numerically small force as ISIS take control of vast swathes of Syria and Iraq?
updated 9:42 AM EDT, Fri October 17, 2014
How big a threat do foreign fighters in Syria and Iraq pose to the West? It's a question that has been much on the mind of policymakers and commentators.
updated 8:21 AM EDT, Fri October 17, 2014
More than a quarter-million American women served honorably in the Iraq and Afghanistan wars. Now they are home, we have an obligation to help them transition back to civilian life.
updated 4:27 PM EDT, Thu October 16, 2014
Paul Begala says Rick Scott's deeply weird refusal to begin a debate because rival Charlie Crist had a fan under his podium spells disaster for the Florida governor--delighting Crist
updated 12:07 AM EDT, Thu October 16, 2014
The longer we wait to engage on Ebola, the more limited our options will become, says Marco Rubio.
updated 7:53 AM EDT, Wed October 15, 2014
Democratic candidates who run from President Obama in red states where he is unpopular are making a big mistake, says Donna Brazile
updated 12:29 AM EDT, Thu October 16, 2014
At some 7 billion people, the world can sometimes seem like a crowded place. But if the latest estimates are to be believed, then in less than a century it is going to feel even more so -- about 50% more crowded, says Evan Fraser
updated 12:53 PM EDT, Mon October 20, 2014
Paul Callan says the Ebola situation is pointing up the need for better leadership
updated 6:45 PM EDT, Wed October 15, 2014
Nurses are the unsung heroes of the Ebola outbreak. Yet, there are troubling signs we're failing them, says John Sutter
updated 1:00 PM EDT, Wed October 15, 2014
Dean Obeidallah says it's a mistake to give up a business name you've invested energy in, just because of a new terrorist group
updated 7:01 PM EDT, Wed October 15, 2014
Fear of Ebola is contagious, writes Mel Robbins; but it's time to put the disease in perspective
updated 1:44 PM EDT, Tue October 14, 2014
Oliver Kershaw says that if Big Tobacco is given monopoly of e-cigarette products, public health will suffer.
updated 9:35 AM EDT, Sat October 18, 2014
Stop thinking your job will make you happy.
updated 10:08 PM EDT, Tue October 14, 2014
Ruben Navarrette says it's time to deal with another scandal involving the Secret Service — one that leads directly into the White House.
updated 7:25 AM EDT, Tue October 14, 2014
Americans who choose to fight for militant groups or support them are young and likely to be active in jihadist social media, says Peter Bergen
updated 9:03 AM EDT, Mon October 13, 2014
Stephanie Coontz says 11 years ago only one state allowed same sex marriage. Soon, some 60% of Americans will live where gays can marry. How did attitudes change so quickly?
updated 4:04 PM EDT, Tue October 14, 2014
Legalizing assisted suicide seems acceptable when focusing on individuals. But such laws would put many at risk of immense harm, writes Marilyn Golden.
updated 9:07 AM EDT, Mon October 13, 2014
Julian Zelizer says the issues are huge, but both parties are wrestling with problems that alienate voters
updated 6:50 PM EDT, Mon October 13, 2014
Mel Robbins says the town's school chief was right to cancel the season, but that's just the beginning of what needs to be done
updated 11:43 AM EDT, Sat October 11, 2014
He didn't discover that the world was round, David Perry writes. So what did he do?
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT