He finally appeared after the storm clouds cleared, and it was only for a few brief moments..
.. to put his spin on what has been a devastating week for Spanish finance. It was Mariano Rajoy, not Europe and the rest of the world, who put the pressure on Brussels to come up with a €100 billion rescue plan for Spanish banks. It was Rajoy who demanded and “got” generous terms for “the loan” the beleaguered banking industry will get. “No one pressured me, I was the one who pressured to get the credit,” the feisty prime minister said on Sunday, the day after bailout day.
This was “a credit,” and not a full bailout like what occurred in those other loser nations. And of course, there was the usual dig at the Socialists. “This should have been done three years ago,” Rajoy emphasised before waving off reporters because he had more important things to do such as getting on a plane to Gdansk, Poland to watch Spain’s first Eurocup match. Priorities first.
What planet does this man live on? Rescue plan, bailout, credit or loan, you decide. Semantics aside, any money that is pumped from one account to another – especially when one is sinking – is indeed salvation. Unfortunately, Rajoy’s bent on the events doesn’t do Spain any good with the rest of Europe. His seriousness is being called into question. The EU leaders know exactly what occurred during that teleconference call on Saturday when the rescue plan was being hammered out by the continent’s finance ministers. It is only a matter of time before some enterprising reporter gets hold of the entire conversation or, better yet, leaks out a transcript of what was said and what wasn’t said.
Socialist leader Alfredo Pérez Rubalcaba put it best when he surmised that Rajoy was acting as if Spain had won the lottery “or that the Three Kings showed up with gifts.” For weeks the Partido Popular (PP) government has been telling us that Spain was not going to need a bailout. I for one agreed because I continued to believe that our prime minister was so headstrong he would have preferred to fill the gaping holes in the Spanish banks on his own. I was wrong. Someone more cantankerous than Rajoy turned the thumbscrews.
From 2004 up to December of last year, Rajoy has been the major opposition leader. He now blames the Socialists for all the financial evils that have taken place in the financial institutions. But never once did Rajoy come up with his own plan or suggestion to seek ways to recapitalise the sector. All he did was repeat his calls for early elections. The signs were all there – everyone knew that the banking industry was on the verge of collapse and government leaders were perhaps hoping that things would just get better before they would have to intervene.
Now the so-called “troika” will have to step in to ensure that there is no more abuse inside the Spanish banking industry. The money these institutions will get will not go to pay fat bonuses to presidents and board members but instead will be used to shore up the entities hit hard by the real estate bubble and ensure that credits are given to those responsible enough to stimulate the economy.
Regardless of what Rajoy says, Spain did indeed get a bailout. Unfortunately this fresh injection of capital won’t calm the markets. Investors continue to press Spain for more measures, which could undoubtedly lead to an extension of the Brussels rescue plan to cover the Spanish government’s entire finances. Changes in the way we do business are no doubt on the horizon. It is only a matter of time before Rajoy finally accepts the fact that he was indeed pressured by the IMF, the markets and other countries to seek out this bank bailout package.
By Martin Delfin, Martin writes for the English language version of El Pais