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?