I repeat once again I have no agenda to smear Spain or even promote my French interests. I actually am very fond of both countries. To write otherwise is just silly, wrong and misguided.
I make no criticism of the people or the country other than the financial and political system for which incidentally most Spaniards themselves have total contempt.
What I was trying to get across is the dishonest way this banking scandal has been dealt with both by banks themselves and politicians. Bad debts have been moved off balance sheets, international loans obtained with inflated property values and statements for years by governments and central bankers that the situation was containable and no bail out was needed. The aim was simply to calm the bond markets and retain investor confidence.
It’s not just the caja’s who have contributed to this disaster. Santander and BBVA have suffered huge losses but the difference is they have had greater resources to sustain it.
The Spanish banks collectively have bad or doubtful debts of €169 bn. that they have come clean with so far. Their none performing assets are grossly over valued in current terms and much of that reason is because of collateral support for previously loans from the ECB.
Spain is faced with dire problems. €32bn of maturing international debt this autumn, bankrupt regions and a banking system that requires as a minimum a €70bn. cash injection.
Rayjoy is resisting help because he knows he will lose control of the country. It’s inevitable, very necessary and about time.