Five years ago the Bank of Spain intervened in the Caja Castilla-La Mancha. This measure marked the beginning of the rescue of the State’s financial institutions and the end of a clear lie: In the words of Rodríguez Zapatero, Spain had the strongest financial sector in the world. This situation followed the biggest crisis in the Spanish financial system, which, according to estimates by the Spanish Court of Auditors, has cost public money of EUR 107 billion.

In these five years, the Spanish Government has intervened in eleven entities, most of them savings banks, and two others have received public subsidies. In addition, the most colossal institutional fusion and integration process has been dealt with in history, there have been successive changes in the solvency and provision laws that forced the government to demand a EUR 41 billion bailout for Europe. So far, the State has only recovered EUR 2.3 billion. As you know, the reason for this wreck was the extraordinary growth of credit in order to finance the real estate career of the early 2000s. The lack of control mechanisms and indifference to solvency were the factors that prevailed over simple credit risk. In these years, the profits of financial institutions stood at around 20% per annum. The brake on real estate prices blew up the system. The Bank of Spain was an indispensable collaborator in the explosion, as it did not see the gravity of the situation.

The fall of the JCC brought two obvious consequences, the resignation of the Minister of Economy, Pedro Solbes, as Zapatero continues to deny the economic crisis to Spain. On the other hand, the gravity of the situation led to the creation of the FROB, an aid fund for rescuing distressed entities. In 2009, the creation of subordinated preferred and subordinated assets was also encouraged to increase the own resources of financial institutions, which have suffered losses following the rescue. The FROB has handled the largest number of rescues in the area. It has contributed over EUR 61 billion to cover the losses of each financial institution and to strengthen its balance sheet. The rest has been carried out using the lines of the SAREB Bank or other types of aid and public funding.

One hundred and seven million euros and five years later there has been neither a criminal nor a political conviction for the responsibility for the financial crisis. The usual practice of accountability in EU public accounts procedures has no indications here, despite the seriousness of the problem. In addition, the salaries and premiums of directors and members of the board of directors of financial institutions are the highest in Europe. The conclusions are clear. On the one hand, this process reinforces the increase in income inequalities in the Spanish State, where the biggest rise in the EU has been recorded. On the other hand, the financial oligopoly, which for a long time had the economic leadership of the State, is being further strengthened by the concentration of capital at the expense of public resources. In addition, the rescue has directly absorbed more than 10% of the country’s GDP or a third of the one-year public budget. Combined with indirect burdens, the situation shows that the current increase in State debt, 36.5 per cent of GDP before the outbreak of the crisis and 100 per cent today, has had an extraordinary impact. This is the main cause of the illegality of public debt.