Friendly Fascism, Corruption and Bubbles. How Spanish banks survived the crash of 2008.

This article gives a short history of fascism and corruption in Spain before describing the current financial problems and their relationship with property and finance.

“Looking back, we probably should have known Spain’s banks would end up this way, and that their reported financial results bore no relation to reality.”

Spain is attracting a great deal of news coverage for all the right reasons lately, but the Spanish people have suffered enough.

It has a recently re-instated monarchy, On 22 November 1975, two days after fascist dictator General Francisco Franco’s death, the Bourbon heir Juan Carlos was designated King according to the law of succession promulgated by Franco. In 1969, when Franco named Juan Carlos as the next head of state, Spain had had no monarch for 38 years.

It has a King who,  as head of the Spanish “branch” of the World Wildlife Fund, thinks it appropriate to holiday in Botswana shooting elephants. That’s the King on the right (ahem)

The king’s daughter, la Infanta Christina Federica Victoria Antonia,  is married to Inaki Undangarin, Duke of Palma de Mallorca, who is currently facing charges of embezzlement of millions of euros.

It has a justice system in tatters, the Supreme Court suspended fellow Judge Baltasar Garzon from practicing for 11 years after investigating so called irregularities in Garzon’s investigation into wide scale corruption within the conservative Partido Popular. Up to 70 senior members were being investigated.

Supreme Court Chief Justice Carlos Dívar on Thursday resigned under pressure for charging 32 long weekend trips to Marbella and other Spanish destinations to the judiciary.

Carlos Divar had bi partisan support when appointed in 2008, the only candidate acceptable to the PP because of his “low profile”. This followed the appointments to the supreme court initiated by Jose Louis Aznar, ex- prime minister of Spain from 1996 – 2004. Aznar, now a very prominent member of Rupert Murdoch’s  News Ltd board, was a founder member of the “coalition of the willing” leading the “oil wars”, even before John Howard. The only natural resources Spain has is a small amount of coal in Asturia.

Aznar was “scholared” in politics by Manuel Fraga.  From 1951, Fraga served in various posts in the Franco regime, including minister for information and tourism.  He took part in the Transition (restoration of the Monarchy),  and formed the conservative People’s Alliance (AP), the precursor to the Popular Party (PP).

Fraga was known as a heavy-handed politician,  the drastic measures he took as chief of state security during the first days of the Spanish transition to democracy deeply damaged his popularity. The phrase “¡La calle es mía!” (“The streets are mine!”) was attributed to him. This phrase was his answer to complaints of police repression of street protests. He claimed that the streets did not belong to “people” but to the State.    

A certain sexual liberality in films was popularly summarized in the expression Con Fraga hasta la braga (“With Fraga [you can see] even the panties”).

Manuel Fraga with Gen Franco, “El Caudillo”, ‘the leader’.

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Who Reigns in Spain

Spanish banking stocks fell in July after Standard & Poor’s Ratings Services and Fitch Ratings downgraded the country’s leading lenders, citing dimming economic growth prospects, a depressed property market and turbulence in capital markets.In reports issued later, the two credit rating agencies said they are keeping the negative outlook on all the banks.

Mr (has) Bean at the G20, ex Spanish P.M. Jose Luis Zapatero

IMF chief Christine Lagarde, the new woman in P.M. Mariano Rajoy’s life.

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Spain has become the new poster child for what ails the EU periphery, with its 10-year bond rate surpassing even Italy’s in a very short timespan. Looking at the details, that shouldn’t be all that surprising.

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