- Development & Aid
- Economy & Trade
- Human Rights
- Global Governance
- Civil Society
Friday, July 1, 2016
- Demonstrators in nearly two dozen cities in Spain raised their voices Friday to protest against the use of public funds to bail out banks while the budgets for basic services like education and health are being slashed.
In the southern city of Málaga, dozens of people chanting “We aren’t paying for this crisis” and “The bank always wins, and I don’t like that” marched through streets downtown in a festive mood and entered a bank to try to cash symbolic checks, saying they were facing “a shortage of funds after the government’s cutbacks,” which especially hurt middle and lower-income sectors.
The simultaneous nationwide protests against the bank bailout were organised over the on-line social networks by Democracia Real Ya (DRY) – Real Democracy Now – a platform that sparked the May 15 movement (15-M).The demonstration “aims to highlight, by peaceful action in many banks around our country, the enormous responsibility of financial bodies for the difficult situation we are in,” Fabio Gándara, a DRY spokesman in Madrid, told IPS.
“We criticise the use of public money to rescue mostly private banks,” Santiago R., a DRY spokesman in Málaga who preferred not to give his last name, told IPS.
The DRY manifesto complains that on the one hand, for the sake of the stability of the financial system, taxpayers are being asked to rescue institutions ruined by ineffective management, while on the other they are being forced to bear the loss of public services.
“There is not even money for heating in public institutes in Valencia, yet millions of euros are being injected into the banks,” said R.
This week, thousands of students, parents and teachers, supported by trade unions and political parties, took to the streets in many Spanish cities to protest the cuts in education and condemn the Monday Feb. 20 brutal police crackdown on a group of students during a peaceful rally in Valencia, in the southeast of the country.
“The situation borders on madness. There is a lack of common sense,” said the Málaga DRY spokesman, in whose view public money should be used to improve the lives of all citizens.
The manifesto calls for an immediate stop to bank bailouts using public money, as well as the clarification of all economic or criminal liabilities arising from poor management of the rescued institutions.
Since the real estate bubble burst in 2008, banks in Spain have been weakened by the numerous outstanding loans at risk of not being repaid and a stock of embargoed real estate.
According to the European Commission, Spain spent around eight percent of its GDP between 2008 and 2011 on helping over a dozen banks in difficulties, and nationalised others only to resell them to the private sector.
The protestors argue that the people who led the banks into this situation are the same ones who financed housing at inflated values, and took unjustifiable risks in order to continue making profits. They are the ones who should answer for the losses due to their mismanagement, not the citizens who are bearing the cost of the rescue actions, they say.
“No one comes to the rescue of ordinary citizens overwhelmed by the crisis and unable to meet their monthly mortgage payments. They simply lose the basic right to housing, recognised in the constitution, and are pursued even after having lost their home,” says the DRY manifesto titled “Yo pago, tú pagas y a los bancos los rescatan” (roughly, I Pay, You Pay, and the Banks Get Rescued).
Spanish Economy Minister Luis de Guindos said Wednesday Feb. 22 that the government will propose measures to alleviate the problem of evictions, with a non-binding “code of practice” for banks that would include the possibility of postponing for two years evictions of persons below a certain “social exclusion threshold”.
United Left lawmaker for Málaga Alberto Garzón described the Feb. 24 (24-F) protests as “very fitting, and many political actors should join them with a view to transforming the system.”
Garzón, a 26-year-old economist who has been active in the 15-M movement since its inception, told IPS he was in favour of recovering “a democratically managed public banking system.”
“We must help families, not banks,” he said Feb. 16, speaking in parliament in the presence of minister de Guindos.
Jordi Calvo, an economist and researcher on social movements and the arms race, told IPS that public intervention in all the banks facing problems “is necessary,” but said “this aid cannot be given in return for nothing.”
“If a bank receives public money, it should become public property and be managed for the general interest,” he said.
Calvo suggested that “aid should also be given to small cooperatives facing liquidity problems, but when they are in trouble they are not treated the same way as the big banks.”
The financial reforms approved Feb. 3 by the government of centre-right Prime Minister Mariano Rajoy slashed the salaries of the executives of the banks that received bailout funds or were taken over by the government.
A decree-law for restructuring Spain’s financial sector requires banks to increase their risk coverage by 52 billion euros, in order to insure against their exposure to toxic assets linked to the real estate bubble.
De Guindos said this money must come from this year’s profits, derived from the sale of the assets, because “not a single euro of public money will be used for this restructuring.”
“The banking sector has behaved in an irresponsible and criminal fashion, bringing about its own ruin,” DRY’s Gándara told IPS, referring to “the macabre paradoxical presumption that those guilty of creating the crisis should be rescued with public money while ordinary citizens have to bear the cost of the crisis.”
Two months into the centre-right People’s Party government, amid the severe economic crisis shaking the European Union, Rajoy has announced a wave of labour, financial, educational and legislative reforms, and plans to present the general budget Mar. 30.