Spain To Accept Strange Cash For Jobs Deal

 

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From Townhall….

Spain to get EU bank aid December 15 in return for job losses: report

MADRID (Reuters) – European authorities will transfer 35 billion euros to Spain’s state bank rescue fund on December 15 in exchange for massive layoffs at Spain’s four nationalized banks, including state-rescued Bankia <BKIA.MC>, El Pais newspaper reported on Sunday.

The cash injection from European bailout funds will be disbursed to troubled Spanish banks two weeks after it is paid into Spain’s bank restructuring fund, or FROB, the paper said.

This is probably a great argument for not nationalizing banks.  I’m not sure how bankers operate in Spain.  Typically, banks don’t allow labor costs to force them into insolvency. 

Bankia, which sought a 23.5 billion euro bailout from the state in May, is expected to be forced to lay off up to 6,000 people from its current 20,000 staff, while NovaGalicia Bank is seen laying off 2,000 of its 5,800 workforce, said El Pais, citing European and banking sources.

Are the banks really 30% overstaffed?  How?  Why?  These banks are broke and have been for some time.  How is it that they’re still overstaffed?

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13 Responses to Spain To Accept Strange Cash For Jobs Deal

  1. DirkH says:

    “How is it that they’re still overstaffed?”
    It’s next to impossible to fire workers in Spain. That’s why companies don’t dare to hire anyone.
    The staff probably stems from the time before they realized they sat on a mountain of fowl credits (bankruptcies in the construction business / housing market), and from before they were nationalized.

    Those worker protection laws work wonders in making job creation impossible. Similar to anti discrimination laws – allow people of a minority to sue for discrimination if not hired, and they’ll never get a job interview in the future.

  2. Bruce says:

    Are the banks really 30% overstaffed?

    Yes.

    • suyts says:

      It’s amazing to me that Spain would find it necessary to have EU mandate job cuts to their own banks. And, why would the EU give money to a nation so irresponsible as to not already have done the necessary things to make their banks solvent?

      • DirkH says:

        “And, why would the EU give money to a nation so irresponsible as to not already have done the necessary things to make their banks solvent?”

        Because we are so thankful that we are not at war with them.

        Seriously. Time and time again, the EU and the Euro is declared as being the one thing that prevents us from slaughtering each other. WW1 and WW2 happened because we didn’t have the Euro. That’s the official mantra.

        That’s also why you should bail out California. Because you are not at war with them. Think about it. Makes perfect sense, no? :-P

      • suyts says:

        Lol, yes, perfect sense….. or something.

      • kelly liddle says:

        Well it is better not to bite the hand that feeds you so a country recieving money from another country is unlikely to go to war. Could be an expensive way to stop wars but it does work.

  3. gator69 says:

    “Because we are so thankful that we are not at war with them.

    Seriously. Time and time again, the EU and the Euro is declared as being the one thing that prevents us from slaughtering each other. WW1 and WW2 happened because we didn’t have the Euro. That’s the official mantra.”

    We once kept peace through nuclear mutual assured destruction, and that has been replaced by economic mutual assured destruction. One is quick and painful, the other is not quick.

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