This is the Spanish paradox: Fighting off a credit downgrade with promises of a new austerity regime, while simultaneously protecting debt-plagued banks from more downgrades. And the latter means new government spending.
Now the central bank is about to pay $13 billion for bank mergers — which may push 50,000 bank workers into early retirement and a life of pensions.
Bloomberg highlights the lucky bankers who now get paid to golf:
The cajas have long used early retirement to pare the workforce, a process that has been good for employees if expensive for the banks. Since a rule change in 2004, banks have had to charge their cost directly to earnings.
Ignacio Barragan, 64, has spent much of his time playing golf and tennis since retiring at 54 from Caja Madrid in 1999 after a 33-year career that took him to the rank of regional director. He’s been earning 100 per cent of his salary ever since and expects his income to drop about 25 per cent when he starts drawing state and private pensions in August.
“I chose to enjoy my hobbies and economically there was no obstacle to doing that,” Barragan said in a phone interview. “For me it was a great solution.”
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