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The bill for the banking crisis grows | Economy

Sareb headquarters on Costa Brava street in Madrid.
Sareb headquarters on Costa Brava street in Madrid.SAREB (Europa Press)

The real cost of the banking crisis remains a heavy burden for the citizens of this country. It is a figure that inevitably grows year after year and has already reached a stratospheric amount: 73,138 million euros between 2008 and 2021. This figure is the sum of the money that the State has had to add each year to the public deficit as a result of the aid to banks that are already written off.

We had stayed at 58,368 million euros at the end of 2020, a volume that was already overwhelming as it was the highest in the entire European Union. The scare has now led to a jump of 14,770 million euros, most of which corresponds to Sareb. As will be recalled, in 2012, the President of the Government, Mariano Rajoy, the Vice President of the Government, Soraya Sáenz de Santamaría, and the Minister of Economy, Luis de Guindos, had assured ad nauseam that Sareb or the “bad bank” would never be a cost to the taxpayer.

The increase in the bill is a consequence of the Eurostat decision of March 2020, which required Sareb’s liabilities to be considered as public debt. The emphasis was then placed on the fact that the change meant an increase in public debt of 35,000 million euros, which raised it to 120% of GDP. It also transpired that the measure had meant an increase in the public deficit of 9,853 million euros.

What has now surprised us has been to verify that the real increase in the public deficit in 2021 due to lost bank aid has been 14,770 million euros, of which most (13,472 million) correspond to Sareb. The explanation for this surprising increase has been that Eurostat has forced the real amount of Sareb’s losses to be reclassified in the deficit and public debt for each year since 2012. Reports from various organizations such as Eurostat, (Eurostat Supplementary Table For Reporting Government Interventions To Support Financial Institutions (April 2022); the General Intervention of the State Administration (IGAE) and the Update of the Stability Program 2022 -2025 of the Kingdom of Spain, explain this impact, according to Antoni Garrido, professor of Applied Economics at the University of Barcelona.

Professor Garrido, the researcher who best knows the impact of the banking crisis on public accounts, warns that “the most worrying thing is that the cost of the banking crisis has not yet ended.” In his opinion, “what is disturbing is that the cost of Sareb continues to rise and the worst thing is that they do not explain it”. In this regard, he recalls that the difference between Sareb’s assets and liabilities is still several billion euros.

The Post-Programme Surveillance Report (May 2022) of the European Commission certifies that, after the latest losses, Sareb’s capital has a negative value of 10,100 million euros. Those responsible for such an expensive management should give a detailed explanation of what happened to the citizens who pay this bill with sacrifices.

He knows in depth all the sides of the coin.

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