Spanish footballer is right, it's not the Germans' fault

Spain's Prime Minister should take lessons from Gerard Piqué and stop finding excuses or someone else to blame for the country's banking crisis

When Gerard Piqué was asked to explain Barcelona's humiliating defeat at the feet of Bayern Munich in last Tuesday's Champions League match, the centre back made no excuses. In keeping with the Catalan team's reputation for being the gentlemen of football, Piqué simply said the Germans had outplayed them.

He was far more gracious than his fellow Catalans, but the fans have stayed faithful and are already out in force putting up the bunting ready for this Tuesday's second leg at Camp Nou.

Yet another defeat would be catastrophic for the region which is deeply scarred by soaring unemployment – triggered by the devastated construction sector – and where anger against the austerity measures of Spain's Prime Minister, Mariano Rajoy, is reaching crisis point. If you add into this mix, the simmering disgust towards the royal family following the latest scandals, it's no surprise the Catalonian independence movement is growing by the day and being joined by those – on the left and right – who want to leave the euro.

It's not just northern Spain on the warpath. The number of jobless is even worse in the south and last week's figures show there are now 6.2 million officially unemployed people – 27 per cent of the population. Around 1.7 million jobs have gone from the construction sector alone since the financial crisis, when Spain was forced to call a halt to its madcap building. Around one million properties are now empty.

Most worrying, though, is that six out of 10 of those unemployed are under 25. Yet the real figures among the young are said to be far higher as those who can afford to are furthering their studies. English lessons are said to be booming.

The outlook is even more ghastly. On Friday, the government slashed its 2013 growth forecast from a decline of 0.5 per cent to a 1.3 per cent fall and predicted growth of just 0.5 per cent for 2014. Although depressing, this was at least far more honest than previous forecasts. Indeed, Rajoy – who was pilloried on Twitter for his absence from the press conference announcing the new numbers – has also revised down the deficit forecast for this year to 6.3 per cent of GDP and to 5.5 per cent next year; meaning its EU budget target is out by two years. While this is a real softening in the austerity drive, more tax increases are on their way which will hit consumer confidence further.

Yet the big problem – sorting out Spain's banking system – is not being tackled. Without taking on the banks, most of the economic reforms are meaningless. There's only one way to do this and that's to make them shift capital out of the unhealthy sectors – such as construction and retail banking – and into the export-led sectors and small businesses that have prospects of growth.

As Goldman Sachs's Andrew Benito points out, there's too much "evergreening" – repeatedly extending the terms or increasing the amount – of loans to inefficient sectors and too little net credit creation. Indeed, the European Central Bank's support which kept the banks afloat to avoid a disorderly deleveraging may have encouraged the evergreening while raising the cost of unsecured lending.

What's now imperative is to get credit flowing again. This can only be achieved if the more profitable banks, such as BBV and Santander, take a tougher approach to bad corporate lending. They must be encouraged to call-in existing loans to unviable businesses and extend credit elsewhere.

If they are nervous about such a strike, then Rajoy will have to bang heads. He needs to learn from Piqué that making excuses – or blaming the Germans – doesn't increase your chances of playing a better game.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Business Analyst - Financial Services - City, London

£50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...

SThree: Trainee Recruitment Consultant

£18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...

Recruitment Genius: Administrator - IFA Based

£22000 - £24000 per annum: Recruitment Genius: This is an opportunity to join ...

Day In a Page

Major medical journal Lancet under attack for 'extremist hate propaganda' over its coverage of the Israeli-Palestinian conflict

Lancet accused of 'anti-Israel hate propaganda' over coverage of Gaza conflict

Threat to free speech as publishers of renowned medical journal are accused of inciting hatred and violence
General Election 2015: Tories and Lib Dems throw their star names west to grab votes

All noisy on the Lib Dems' western front

The party has deployed its big guns in Cornwall to save its seats there. Simon Usborne heads to the heart of the battle
How Etsy became a crafty little earner: The online market has been floated for £1.2bn, but can craft and capitalism coexist?

How Etsy became a crafty little earner

The online market has been floated for £1.2bn, but can craft and capitalism coexist?
Guy Ritchie is the latest filmmaker to tackle King Arthur - one of our most versatile heroes

King Arthur is inspiring Guy Ritchie

Raluca Radulescu explains why his many permutations - from folk hero to chick-lit hunk - never cease to fascinate
Apple Watch: Will it live up to expectations for the man or woman on the street?

Apple Watch: Will it live up to expectations?

The Apple Watch has apparently sold millions even before its launch tomorrow
Don't fear the artichoke: it's a good cook's staple, with more choice than you'd think

Don't fear the artichoke

Artichokes are scary - they've got spikes and hairy bits, and British cooks tend to give them a wide berth. But they're an essential and delicious part of Italian cuisine
11 best men's socks

11 best men's socks

Make a statement with your accessories, starting from the bottom up
Paul Scholes column: Eden Hazard would be my Player of the Year – but I wonder if he has that appetite for goals of Messi or Ronaldo

Paul Scholes column

Hazard would be my Player of the Year – but I wonder if he has that appetite for goals of Messi or Ronaldo
Frank Warren: Tyson Fury will be closely watching Wladimir Klitschko... when he wins it'll be time to do a deal

Frank Warren's Ringside

Tyson Fury will be closely watching Wladimir Klitschko... when he wins it'll be time to do a deal
London Marathon 2015: Kenya's brothers in arms Wilson Kipsang and Dennis Kimetto ready to take on world

Kenya's brothers in arms take on world

Last year Wilson Kipsang had his marathon record taken off him by training partner and friend Dennis Kimetto. They talk about facing off in the London Marathon
Natalie Bennett interview: I've lost track of the last time I saw my Dad but it's not because I refuse to fly

Natalie Bennett interview: I've lost track of the last time I saw my Dad

Green leader prefers to stay clear of her 'painful' family memories but is more open about 'utterly unreasonable' personal attacks
Syria conflict: Khorasan return with a fresh influx of fighters awaiting the order to start 'shooting the birds'

Khorasan is back in Syria

America said these al-Qaeda militants were bombed out of the country last year - but Kim Sengupta hears a different story
General Election 2015: Is William Cash the man to woo Warwickshire North for Ukip?

On the campaign trail with Ukip

Is William Cash the man to woo Warwickshire North?
Four rival Robin Hood movies get Hollywood go-head - and Friar Tuck will become a superhero

Expect a rush on men's tights

Studios line up four Robin Hoods productions
Peter Kay's Car Share: BBC show is the comedian's first TV sitcom in a decade

In the driving seat: Peter Kay

Car Share is the comedian's first TV sitcom in a decade. The programme's co-creator Paul Coleman reveals the challenges of getting the show on the road