Sunday, July 8, 2012

The destruction of the Basque public banking system

Guinda[es]: sour cherry. 
Guindo[es]: sour cherry tree (Prunus cerasus).
De Guindos[es]: Spanish Minister of Economy who spouses brutal ugly scary looks. 

For some odd reason the humble fruit has become important in Spanish language phraseology:
  • Guindar: coll. for to steal, to rob (surely from stealing sour cherries from the trees, a common teenager pass-time in days long gone).
  • Caerse de un guindo: (lit. to fall from a sour cherry tree) expression that means to realize the obvious, to suffer a sudden and undesired reality check.
  • Poner la guinda: (lit. to place the sour cherry... onto something) is to finish, to ultimate the last details... an obvious bakery reference, as glazed sour cherries were what went on top of the cakes traditionally or even inside some drinks as decoration and treat.

This last meaning is the one that  Guzmán Ruiz Garro, former  chose to explain, in an article for Branka[es], what is happening with Spanish (and Southern Basque) saving banks: they are being liquidated, finished. This seems to be the grand design of the IMF and the European Commission, who have decreed that all the savings banks (known as cajas) of Spain will have to be transformed into... foundations.

Yes, you read well: foundations, charities, private non-profit entities. It is anybody's guess how will they be able to ever repay their debts (those that have them) if they stop being financial entities and why would this decree apply only to Spain and not to all the EU. 

But that's what the Spanish government has accepted instead of just declaring Bankia and the other problematic cajas bankrupt, as they actually are - and only then nationalize them (privatizing them was Brussels' idea to begin with).

It is most worrisome that a long list of cajas, traditionally serving the public as easygoing semi-public local banks with a social facet, are being liquidated for good. This kind of low-tier semi-public banking is what Brussels and the IMF seem to be set on destroying - for the benefit of the Big Banksters, of course. 

I already mentioned in March how the Savings Bank of Navarre (CAN) was sold out in an scandalous maneuver by the conservative-unionists, scamming the Navarrese people (who is fiscally semi-autonomous) some €500 million. Now the danger is with the Western Basque cajas, which were fused into Kutxabank recently by means of devilish pacts of the Spanish unionists and the Basque conservatives, excluding the Basque Nationalist Left (first or second political force in the Basque Country). 

Ruiz Garro ponders that these cajas won't be able to reach the end of the year with the newly required profits (which would be turned into extra capital by decree). It could be the case that the public institutions, in this case the Western Basque chartered provincial governments (and to lesser extent town halls and the semi-federative Western Basque autonomous government). But these entities have low liquidity also these days and it may be questioned, with some reason, whether they should intervene at all. 

So he expects these savings banks to be liquidated into "foundations" as well by the end of the year, what will severely damage the financial stability of the Western Basque Country. 

He does not mention it, but luckily there are other cooperativist savings banks (Euskadiko Kutxa and Ipar Kutxa, now in a fusion process). They tend to act more like pure banks but they are still not yet your usual private bank, having the backing of the Mondragon Cooperative Network and Farmers' cooperatives. But it is still not the same as a distinct public banking system under direct control of elect institutions. 

It is a clear setback for democracy and a consolidation of the quasi-feudal aspects of late financial Capitalism. A clear attack against the Basque People and our autonomous intstitutions. We should leave EU altogether (except for Schengen): be more like Switzerland or Iceland and less like Ireland or Spain.

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