BANKING CRISIS

Socialists finally back demands for Bankia probe commission

Party leader Rubalcaba does U-turn in response to internal pressure for financial investigation

Alfredo Pérez Rubalcaba during a congressional debate.
Alfredo Pérez Rubalcaba during a congressional debate.EMILIO NARANJO (EFE)

After dithering about whether or not do so, the opposition Socialist Party leadership finally on Wednesday caved in to pressure from within the political group to back the demands of other forces for a parliamentary commission to investigate the events that led to Bankia having to request the largest-ever bailout in the Spanish banking sector.

The Bankia meltdown has significantly increased investor concerns about the true state of Spain's banking sector, which holds large amounts of devaluating real estate. On Monday it emerged that Banco Financiera y de Ahorros (BFA), the parent company of Bankia, was technically bankrupt last year, with a negative net worth of 4.489 billion euros, according to the bank's restated financial results. BFA and Bankia have requested a total bailout from the government of 23.4 billion euros to clean up their balance sheets.

Socialist leader Alfredo Pérez Rubalcaba had previously confined himself to asking for government officials, former bank executives and the Bank of Spain governor Miguel Ángel Fernández Ordóñez to appear before Congress on Bankia. Rubalcaba had said that because the Popular Party (PP) has an absolute majority in Congress, it could control any such commission's work.

Rubalcaba's leadership rival Chacón asked for the party to encourage the creation of a probe

But in recent days the Socialist leader had been asked by several leading party members to change that strategy. The pressure was so strong that Rubalcaba and his congressional spokeswoman, Soraya Rodríguez, used the social network Twitter to introduce some harsher tones into his stance.

The pressure was especially evident during Tuesday's closed-door meeting of Socialist congressional members and senators, which lasted three hours. The gathering was also notable because it marked the return to the fore of Carme Chacón, former defense minister with the previous administration and a runner-up to Rubalcaba in this year's race to lead the Socialist Party. In a long, prepared speech, Chacón reportedly asked for the party to encourage the creation of a Bankia probe.

Chacón talked about the need for democratic transparency and used the term "comisión de la verdad" (truth commission) to describe the congressional group that should investigate the downfall of Spain's fourth-largest lender.

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