the euro zone
First came a long period of apparent immunity from justice, but now Rodrigo Rato is being held to account. On Monday, the former Spanish economy minister and IMF boss appeared in Spain's High Court in connection with allegations of fraud, falsifying accounts and price-fixing in the run-up to Bankia's disastrous state bailout in 2012. His latest trial is expected to run for months and will make him even more of a hated figure among Spaniards than he already is: over 300,000 retail investors lost their life savings as a result of Bankia's downfall, over which the disgraced politician presided.
Rato, who was Bankia's chairman between 2010 and 2012, arrived at court from prison, where he recently started a four-and-a-half-year sentence in connection with the notorious "black credit cards" case. That scandal also concerned his time at Bankia, specifically the €100,000 he spent on limitless corporate credit cards between October 2010 and November 2011.
Although the details of the new trial are different, the charge against Rato this time is essentially the same as it was in the "tarjetas black" case: squandering taxpayers' money.
Bankia, formed in 2010 by seven regional Spanish savings banks, raised €3.1 billion in its Initial Public Offering (IPO) in July 2011. It's hard to believe, though, that the customers who bought this damaged stock were aware of what they were investing in: one thinks of Leonardo DiCaprio's character Jordan Belfort in The Wolf of Wall Street, confidently selling worthless penny shares to easily-duped "investors".
Things were far from rosy at Bankia in 2011, despite what the pre-IPO balance sheets might have said. In May 2012, the bank announced a loss of €4.3 billion during the previous year, instead of the €309 million profit it had previously declared. The Spanish government rapidly intervened, saving Bankia from meltdown with a record-breaking €20 billion bailout, which in turn forced it to borrow €40 billion from the EU. Spain thus substantially increased its public debt levels, which had been relatively low before the European Debt Crisis began in 2009.
Rato faces five years in prison if found guilty of price-fixing or falsifying accounts during the near-collapse of Bankia, which crippled hundreds of thousands of Spanish households. If it's added onto the term he began last month - after offering an unconvincing apology to those who "may have felt deceived" by his actions - Rato could spend almost a decade behind bars.
The unscrupulous greed of Spain's political "elite" is embodied in the country's former economy minister, and his appearance in a second major fraud trial should serve as a warning to the other bandits of Spanish politics. It's only fair and just that this remarkably corrupt politician, once untouchable, now splits his time between a prison cell and courtroom.