The Spanish Government is Preparing Another Bailout of Billionaire Oligarchs

Over the weekend, I covered the extraordinarily disturbing new law that just passed in Spain which essentially criminalizes protests and allows for up to 30,000 euro fines for simply wearing a mask. It’s all starting to make sense now, as the country’s Prime Minister Mariano Rajoy prepares a new oligarch bailout, this time of the country’s highway operators who of course must be saved at all costs. They know the protests are coming and they want to be able to deal with uppity peasants when they feel the need to get out into the streets. Truly despicable. From Bloomberg:

Spanish taxpayers have bailed out banks and power companies. Next up are highway operators and their billionaire owners.

Prime Minister Mariano Rajoy’s government is considering a 5 billion-euro ($6.7 billion) plan to take over and guarantee the debt of about 364 miles (585 kilometers) of roads, according to two people familiar with the matter who declined to comment because no final decisions have been made.

“This is another repeat of ‘too big to fail’,” Jose Garcia Montalvo, an economics professor at Pompeu Fabra University in Barcelona, said in a telephone interview. “You don’t need to worry if something goes wrong, the government will come to the rescue.”

Oligarch rules.

The roads are controlled by some of Spain’s biggest companies, including the Del Pino family’s Ferrovial SA, the Koplowitz family’s Fomento de Construcciones & Contratas SA, Sacyr SA and Actividades de Construccion y Servicios SA, run by Real Madrid Chairman Florentino Perez. They’re entitled to the rescue through a law passed under General Francisco Franco in 1972, which stipulates that when a private highway goes bust, the state has to repay its owners for the cost of the land and the construction.

Well sure, if a former fascist dictator says it’s the right thing to do…

As Rajoy struggles to turn around the Spanish economy after two recessions that destroyed almost 4 million jobs, the Franco-era concession law is adding to a bailout bill for banks and the regions that already exceeds 140 billion euros. Spain’s sovereign debt totals about 775 billion euros, according to the Bank of Spain.

One of the biggest beneficiaries from the highway bailout would be Ferrovial’s Radial 4, which has been run by court-appointed administrators since October 2012, when the owners sought creditor protection after traffic volume fell to a record low.

Ferrovial was founded by Rafael del Pino y Moreno in 1952 to work on the country’s railways and in 1968 it won Spain’s first private highway concession, according to the company’s website. Its specialist highways unit, Cintra, now manages 26 highways in nine countries including a Toronto ring-road.

The Del Pino family is worth at least $5.7 billion, according to Bloomberg Billionaires Index. Their wealth has increased by about $1 billion this year as Ferrovial’s stock gained 22 percent; they’ve collected more than 580 million euros in dividends since Spain’s economic crisis started in 2008, Bloomberg Billionaires data show. Esther Koplowitz, who controls 54 percent of Barcelona-based FCC, is worth as least $1 billion, according to the ranking.

“The government isn’t rescuing the thousands of small businesses that failed during the crisis,” Gonzalo Bernardos, a professor of economics at Barcelona University, said in a telephone interview.

Of course they aren’t. You are just a serf in the Oligarch Hunger Games.

Full article here.

In Liberty,
Mike

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