EU referee shows yellow card

It is no secret that Spanish soccer has been living within an economic bubble that may burst at any moment. The financial situation of the clubs in the professional league has been gradually worsening, as may be seen from the number that have declared themselves in bankruptcy or situations of non-payment, and from their accumulating tax debts, which are indeed being reduced, but at an excessively slow rate.

The European Commission has just pointed to one of the causes of this bubble — the connection between soccer and public money — by launching an investigation into six clubs of Spain's first division (Barcelona, Real Madrid, Athletic Bilbao, Valencia, Osasuna and Elche) and one from the second (Hércules) for receiving illegal public subsidies: illegal under EU norms, because they involve an unfair advantage over European clubs that do not receive such treatment.

The seriousness of the matter is reflected by the furious accusation of the European ombudsman, Emily O'Reilly of Ireland, against the commissioner Joaquín Almunia, whom she accuses of obstructing the investigation into Spanish soccer because he is personally a member and fan of Athletic.

The investigation, which for the moment amounts only to a "yellow card," is looking into three types of infractions. The first is that which mainly affects Valencia, Elche and Hércules, who combined have a pending debt of 118 million euros with the Valencia regional government — which, in a spasm of irresponsible management, guaranteed loans to these clubs. If the investigation confirms the allegations, and the regional government cannot demonstrate the reasons of "social utility" that motivated the guarantees, the affected clubs must return the public money, or face the risk of disappearing. Athletic, whose financial situation is good, also received public money, by way of the company San Mamés Barria, to build the new San Mamés stadium.

The second reason for suspicion is a land swap between Real Madrid and Madrid City Hall in 2011, which was very beneficial for the club. The European clubs who complained of this deal consider that it was a real estate killing handed on a platter to Real, and that the operation constitutes a case of unfair competition.

The weakest of the charges affects Real Madrid, Athletic, Barcelona and Osasuna. These did not convert themselves into limited companies in 1990, when the rest of the Spanish clubs did so. For this reason they enjoy more favorable fiscal treatment (five percentage points lower) than limited companies. But the decision was a legal one, the accounts of all four clubs were sound, and there is no reason for a retroactive sanction.

The EU investigation must be interpreted as a warning that soccer clubs cannot live on covert subsidies and disguised real estate operations, while revenues of their own are on the wane. Independently of the consequences that may arise from the European investigation, the Spanish sports authorities are under an obligation to take the initiative, so that the clubs will duly pay their taxes, and exercise more austerity in terms of salaries and signing of new players. This must apply to all of them.