Spain reaction: 'This is a rescue for the rich. The poor will only get poorer'

By Fiona Govan, Madrid
8:13PM BST 10 Jun 2012

http://www.telegraph.co.uk/finance/financialcrisis/9322722/Spain-reaction-This-is-a-rescue-for-the-rich.-The-poor-will-only-get-poorer.html

Mobs of angry citizens storming branches, banging saucepans and chanting slogans in noisy protests at the plan to rescue Spain's most stricken banking entity while the population suffers deep austerity measures and struggles against disappearing credit-lines.

But as Spaniards woke up today to the news that the EU had given their banks a lifeline of up to €100bn there was optimism that, at last, something had been done to stop the rot.

"Spain, finally, will be rescued," screamed the frontpage of Spain's leading daily newspaper El Pais. "Tragedy for the moment has been averted."

Even as pundits struggled to explain the about turn by the government which had insisted even hours before the announcement that no such request would be made, Spain's embattled Prime Minister claimed the agreement as a personal victory.

"Nobody pressured me and I don't know if I should say this, but it was I who pressured for a line of credit," said Mr Rajoy. Avoiding use of the word "rescue" he claimed the "opening of credit lines" from the EU was the best possible solution for Spain's current problems and did not come with any "conditionality" but that Spain would continue on its path of austerity and structural reforms.

While acknowledging that a "line of credit" had been opened up for Spain's financial system, he accepted that the country's deep economic misery would worsen. "This year is going to be a bad one," he said.

That warning will only add to the public outrage at the disastrous state of Spain's banking sector which has brought the nation to its knees. Co-ordinated groups have been taking simultaneous action at bank branches in cities across Spain, mobilised by social networks, to find a voice against what many view as the scandal of banking mismanagement.

"Why should they rescue the banks when our children are starving?" screamed one placard outside a Bankia branch in Madrid's Plaza de Celenque during a protest at the weekend.

Many protestors have already lost their homes due to foreclosures and complain of the generosity towards the banking system while they are left without aid. Spaniards are slamming the 'impunity' of the bankers as details of pay-offs to former senior executives further enrage those struggling to pay their bills and suffering deep cuts in public spending.

Many hold the view that those responsible for mismanaging the stricken banks and hiding the extent of problems for so long should be investigated alongside any injection of capital.

"It's time to call these people to account. One year ago they insisted Bankia was a sound institution and told workers to invest. Now these people have lost 40 per cent of their savings," said Pedro Videla, economics professor at Madrid's IESE business school, who argued that if there is to be any restoration of faith in the sector then: "Those responsible need to go to jail."

An opinion poll published on Sunday showed that 78 per cent of Spaniards had "little or no" confidence in Mr Rajoy or his governing Popular Party.

"How can we trust anything this government says?" said Francisco Silvente as he walked his dogs down a quiet Madrid street yesterday morning. "This is not a rescue for Spain, it's a rescue for the rich. The poor will only get poorer and suffer even more in the months to come."