Varoufakis: How is it that Spain is going bankrupt?

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"I can understand Greece being in this situation. Suppose we are tax evaders, corrupt, lazy, indebted from birth, wanting to live by the sweat of the people who produce. The Spaniards, though? Why are they to be blamed?

-          didn’t Spain have a surplus just before the crisis?

-          didn’t Spain have a debt much lower than that of Germany just before the crisis?

-          wasn’t Spain the country with the only profitable Olympic Games in history, leaving a beautiful Barcelona as heritage?

-          wasn’t Spain the country with the example of Zara, which proved that Europe can manufacture its own textile products without having to transfer jobs to the Far East?

-          wasn’t Spain the country that offered Volkswagen its most profitable factories (Seat) in Europe?

And yet this country is currently in the same black hole as us. How is this even possible, if the crisis is due to misfortunes that undoubtedly characterize Greece but not Spain?

For a moment let us forget our own drama and let us consider the one that is taking place in Spain (not only in solidarity with the likeable people of the western Mediterranean, but because doing so will make us better understand what is happening to us now, at this moment):

Since last summer, the losses of the foolish Spanish private banks (caused by gambling in real estate) have been transported onto the shoulders of the Spanish State, resulting in the actual removal of the latter from the "markets".

In order for the EU to not admit that Spain is the fourth country that will “forfeit”, they have come up with the following insane “solution”:

1.       The ECB will accept whatever it is offered by the Spanish banks as "collateral" and thus will lend over 300 billion at 1%

2.       Since this money is borrowed, and with borrowed money you cannot avoid default (only delay it), the Spanish State will borrow more money (from the EFSF) at a rate around 4% to give to the banks (during the recapitalization) - but of course without receiving back common shares (which is a flagrant violation of the rules of capitalism…)

3.       But because of No2, the Spanish State is pushed deeper into bankruptcy. In order not to sink immediately though, they have come up with the following wise idea: while receiving the loans (non-refundable) from the Spanish State, the banks will lend part of the loans at rates of 6%, which they receive from the ECB at 1%.

Do you understand what this means?

The bankrupt banks first transferred their losses to the Spanish State, leading it to default, then secured tonnes of loans from the ECB (at 1%), then lent a portion of that money to the Spanish State (at 6%), all the while borrowing from the Spanish State more money that the Spanish taxpayer borrows from the EFSF.

And as if all this were not enough, the inviolable condition so that Spain can use this "solution" is to impose austerity that will shrink the national income even further, from which the state should raise the taxes needed to repay all these loans wihch have been burdening the Spanish people by the bankers.

So when European colleagues, journalists and politicians are pointing at Greece because it dared say no to the European anti-crisis 'project', I answer bluntly: I will admit what you want, but when you explain to me in simple words 'what the hell are you doing to Spain?' "