Spain bank workers protest layoffs

The Spanish banking sector is still staggering from the blow of a 2008 property crash, which left lenders awash with bad loans.

Prime Minister Mariano Rajoy last year secured an agreement for a European Union rescue loan of up to 100 billion euros (RM397.58 billion) to fix the banks' balance sheets, and a first slice of 37 billion euros (RM147.10) has already been pumped into stricken banks.

Unions say the result of the banking crisis has been tens of thousands of jobs axed for ordinary workers.

At the same time, they say, top executives, such as former Bankia chairman Rodrigo Rato and the former vice president of Bankia parent group BFA, Jose Luis Olivas, have escaped punishment.

Spain's largest union, the Workers' Commissions (CCOO) and the General Workers Union (UGT) called for street protests Wednesday evening outside the Bank of Spain headquarters in Madrid and in other cities including Barcelona and Valencia.

"We think it is unacceptable that those who abused their managerial positions in the financial entities bailed out by the state, such as Mr. Rato and Mr. Olivas, among others, should stay free while being responsible for bringing thousands of Spanish families into ruin," said a statement by the UGT.

"Meanwhile, more than 30,000 jobs have been destroyed since 2008 and all the forecasts point to another 20,000 being destroyed in the next five years."

Rato, a former managing director of the IMF who resigned as chairman of Bankia in May 2012 days before it was bailed out by the state with billions of euros, has become a target for critics of the management of the banking system.

Bankia lies at the heart of the banking crisis with by far the greatest losses on its balance sheet. It has so far received around 18 billion euros (RM71.56 billion) from the European rescue loan, and in November it announced 6,000 layoffs.

On December 20, Rato was questioned by a judge over fraud charges related to the collapse of Bankia. Despite the unresolved questions, Spanish telecoms giant Telefonica announced Friday it had hired him as an adviser.

The Bank of Spain is also on the back foot after being harshly criticised for its surveillance of the financial system.

"We have detected some shortfalls, vagueness, and a failure to update procedures that should be corrected," said a report drawn up by an internal committee of the central bank and published late Tuesday.

The report, required by Brussels as one of the conditions of the rescue loan for Spain, notably recommended placing a central bank inspector permanently in each of Spain's 16 largest banks to more closely monitor their business.