Typically, according to "Great Power" theory, Spain lost its status as a Great Power in the Napoleonic era, and hence, it gets ignored... too much, in my opinion. The reason? Spain may have fallen on hard times from the end of the Napoleonic era up through the Spanish Civil War and the victory of Franco, but under Franco it regained much of its lost economic clout and, despite grievous setbacks in recent years, in 2016 was the 10th largest world economy by Gross Domestic Product, and the fifth largest in the European Union, behind Germany, the U.K., France, and Italy, and just slightly ahead of the Netherlands. But Spain, in a manner rather similar to Great Britain, does have an enormous soft-power card, due to the enormous influence it has had historically on the development of western culture. From the Philippines to Central and South America, Spanish culture became the dominant influence. During World War Two Franco carefully maneuvered, in spite of enormous pressure to join the Axis, to keep Spain neutral, playing the soft power card quite effectively in this effort, reminding the Axis powers that any invasion of Spain would be met with stiff resistance, and sever any useful ties the Axis had, via Spain, with the rest of the Latin world and most importantly, with their considerable investments in South America. In return, Franco bought Spain's neutrality by sending a "volunteer" infantry division, the "Blue" division, to fight with the Axis in the Soviet Union, where it distinguished itself in combat operations in and around Leningrad.
So when a major economy of the West decides to start arresting banksters, I sit up and take notice (thanks to Mr. B.H. for sharing this article):
Spain Follows Iceland As Mass Arrests Of Top Bankers Begin
Note how this article by Jacky Murphy begins:
Spain's Supreme court last year ruled that there was “serious inaccuracies” about listing led investors to back Bankia in error, as a result the bank has paid out millions of Euros in compensation.
If one translates this, what the Spanish Supreme Court is really saying is that Bankia, a consortium built from other failed banks(!), failed to apprise investors of serious exposure and risk; in short, it committed major material omissions of fact. This in and of itself is highly significant, but its import takes on a more sinister aspect when one connects it to the last paragraph in the article:
“The court is questioning why they allowed Bankia to sell shares in an initial public offering in 2011, less than a year before Bankia’s portfolio of bad mortgage loans forced the government to seize control of it. It said there was evidence the regulators had ‘full and thorough knowledge’ of Bankia’s plight. After its nationalisation, it went on to report a €19.2bn ($24.7bn) loss for 2012, the largest in Spanish corporate history.” (Emphasis added)
Now, many people may recall that Spain did indeed embark on an orgy of real estate projects during the pre-2008 boom, and, like other countries, when the housing bubble collapsed, the problems began. Additionally, while not often mentioned in connection to the refugee crisis, the Spanish government, like others, fell victim to the the multicultural virus and began importing refugees to such an extent that it dramatically effected the ability of native Spaniard youth to gain jobs; consequently unemployment rose dramatically, and with it, calls for secession from Madrid in various regions, most notably Catalonia. One reader of this website, located in Spain, referred years ago to the whole process of being one of remaking Spain into "Spanistan." And though we don't hear of Spain in this connection as often as we do of the Netherlands, France, Germany or Italy, or for that matter Great Britain or the USA, there has been a growing backlash against these policies among Spaniards.
What caught my eye here, however, was the admission that Bankia's and indeed Spain's economic woes were due to the same cause as elsewhere: "bad mortgage loans." That, as one might imagine, caught my eye because I strongly suspect there is much more going on in between the lines, as it were, than the Spanish people, and indeed the rest of us, are being told. Bad mortgage loans would seem to be a euphemism for "mortgage backed derivative securities," and with that possibility comes today's high octane speculation, for we all know what large European bank is up to its earlobes in derivatives exposure, and which has been the target of a number of investigations in Great Britain, the U.S.A., and Italy: Deutsche Bank. As of yet, I know of no direct evidence connecting Bankia's woes to those of Deutsche Bank, other than this exposure to "bad mortgage loans." But if here, as elsewhere, this is connected to derivatives exposure, then I suspect that eventually the Spanish investigators might be connecting all sorts of dots. Those dots, I rather suspect, will take them first to Italy, where similar patterns of material omission, usage of the float, and so on, seem to be implicated in the controversy surrounding Italian investigations of Deutsche Bank in connection with Banca dei Paschi di Sienna, and from there I suspect the Spanish, too, will be led eventually to Frankfurt.
And in the prevailing political atmosphere, this does not bode well for Mad Madam Merkel's political future.
See you on the flip side...