Europe imposes 32 new rules on Spain as a condition of bank bailout fund

Spain will be forced to comply with 32 conditions laid down by the EU if it wants to get its hands on the 100,000-million-euro bank bailout.

IVA will have to go up and tax relief on first homes will be scrapped as part of the list.

The ministry of the economy will have to hand over much of its jurisdiction to the Bank of Spain, particularly in terms of the power to sanction financial institutions and granting licences for them to trade.

Internal audits within the Bank of Spain will be carried out, and the Central European Bank (BCE) will supervise its activities.

The Ordered Bank Restructuring Fund (FROB) will have greater powers, and the government must force banks which are sinking to wind up.

Those which require public funding to stay afloat must hand over their affairs to a liquidation company, cut down branch numbers and slash jobs, sell off investments and shares in industry and limit bank managers’ salaries.

Banks which have received State help will be obliged to float on the stockmarket, and savings banks – effectively, building societies – will no longer be able to manage their own commercial banking activities.

Holders of preferential shares and other ‘hybrid’ investments will be expected to bear a percentage of the loss when a bank needs public funds to be able to continue.

Overall, Spain’s banking sector will be closely supervised by the European Commission (EC), the BCE and the European Banking Authority – the latter taking the place of the IMF – and will regularly audit those institutions which have received bailout funds to ensure they comply with the rules.

This will involve their having to supply weekly data on their liquidity and cash held in deposit in client accounts.

Taxpayers will be directly affected by a rise in IVA – the exact percentage of which has not been confirmed – the elimination of tax breaks on first residences, labour reforms, a rise in State retirement age, and a ‘taxation system which aims at fiscal consolidation’, as yet undefined.

Spain’s State deficit will have to come down from its present 8.9 per cent of its GNP to 6.3 per cent by the end of 2012, then to 4.5 per cent after 2013 and 2.8 per cent by 2014.

The banks for which the bailout fund is destined will include, among others, Bankia, CatalunyaCaixa, NovaCaixaGalicia and Banco de Valencia, being the four most pressing cases.

Article source: ThinkSpain.com

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5 thoughts on “Europe imposes 32 new rules on Spain as a condition of bank bailout fund

  1. DQ

    Sounds like quite a mess. I am not sure I’d allow the EC, BCA, or BCE to have control over that much. The money is nothing — they can print it at a whim, it’s about getting their hands on control of Spain’s banking. THAT is the whole point of “bailouts.”

    I hope Rajoy doesn’t fall for it. They need to tell the EC to bug off and get back to pesetas and start over.

    Once again I say, the PEOPLE did NOT create this mess. The PEOPLE should NOT have to bear any weight at all in this BANK bailout.

    1. DQ

      This is all about reorganizing the global finances. This is about moving mass amounts of wealth directly into the banksters hands — right in front of our eyes with a lie.

      This is about the elite gaining control of the assets of a country — it’s all planned, this is not something new. It is not expected that the country accepting the bailout will pay back the loans, it’s about the country failing to pay back the loans and then having to sell it’s assets to the elite. It’s all just a big game of Monopoly — but in this game, it’s real.

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