When you discover the lid of a pot whose contents you don't know, everything comes out. This is what has been happening in Spain in recent weeks with two emblematic cases, very different from each other, but united by the mistakes made in the past: Catalonia and Bankia.
In the first case, the extremism that has taken place in the region of independence from the central authority of Madrid has led to an explosion of costs and therefore to budgets that are no longer manageable. All the more so if the economy is no longer as good as it used to be and can therefore no longer act as a "buffer" to spending too cheerfully.
At the root, however, is the failure of Spanish federalism, which has given the region too much independence in terms of taxation, healthcare, infrastructure and has therefore loosened the cordon of controls.
The fact that the crisis has hit an autonomy like the Catalan one is symbolic of the deep malaise of a country. Catalonia is the second most important region of Spain and its contribution to the Iberian GDP is indispensable. If he doesn't visit Catalonia, he doesn't visit Spain.
Bringing its mega-deficit back as soon as possible, with a decisive cut in spending and an austerity plan spread over several years, is therefore essential to put the region's and the country's accounts in order. As well as an obligation towards Brussels which is asking Spain for a decisive change.
For the Spanish president Mariano Rajoy, the solution of the Catalan knot is strategic. Just as it is strategic to avoid the bankruptcy of Bankia, the institute born a couple of years ago from the merger of seven savings banks around Caja Madrid. In fact, Spain's image, its reliability and therefore its future are at stake.
The skein is complicated. Bankia was substantially nationalized after the failed management of the former finance minister and former director general of the IMF, Rodrigo Rato. However, what collapsed was the plan of former premier Zapatero to group the battered Spanish savings banks around healthy groups without knowing the real situation of the sector and therefore the abyss of stranded/uncollectable items (above all real estate) that the banks would have brought as a dowry.
It is no coincidence that the Bankia bailout will cost the Spaniards something like 20 billion euros. Billions that accumulate to those (heavy) already invested in other entities that would have been better to bankrupt, for the good of the market and the country.
But that's not all, because the injection of public money will be joined by the cut of thousands of employees. Both in Bankia and in Catalonia.
This is to say that unemployment in Spain is destined to grow significantly in the coming months as well. Above all in the presence of a recession that leaves no room for easy optimism. In the meantime, the spread with the German bund is traveling above 500 points and credit is becoming increasingly difficult.
Perhaps a breath of fresh air will come with the summer and with the arrival of foreign tourists. This, at least, hopes Mariano Rajoy. But it will be a placebo. What Spain needs are deep structural reforms, in order to leave behind an economic model (invented by Aznar and continued by Zapatero) based on easy credit and real estate. A fragile model that went well when the domestic and international economy was buoyant, but failed as soon as the crisis hit and the speculative bubble burst. With serious consequences for employment, but also for the country's public finances.
To patch it up will take time, good will and the help of Brussels. Hoping that in the meantime the financial markets do not rage against Spain causing it to collapse like Greece. A scenario that would be catastrophic not only for Europe, but also for the Euro.
