Nov. 28 - Thousands of job losses and tens of billions of euros of asset sales are part of the price of a Spanish banking restructuring that will see EU give the sector aid to try to help it out of a crisis. Joel Flynn reports.
They're trying to stop the rot, but for Bankia the cost is huge. The nationalised Spanish bank is cutting 6,000 jobs. Its restructuring plan also includes closing branches and shedding 50 billion euros of assets, as it tries to return to profitability next year. Bankia's Chairman is Jose Ignacio Goirigolzarri. SOUNDBITE: Bankia Chairman, Jose Ignacio Goirigolzarri, saying (Spanish): "We need to reduce the number of our employees, the number of our people, our staff. And as you can see, we are talking about a cut of 28 percent." Bankia's not the only lender making painful cuts - three other nationalised lenders are following suit. The EU demanded a restructure of the Spanish banking industry in order for it to receive 40 billion euros in aid, which should put an end to the sector's crisis. Joaquin Almunia is the EU Commissioner for Competition. SOUNDBITE: EU Commissioner for Competition, Joaquin Almunia, saying (Spanish): "This means that Spain will be able to count on a financial sector which will be healthier and more viable to fund the real economy and will contribute thus to the economic recovery of Spain." Banking activity in Spain will be reduced to about 60% of 2010 balance sheets. Though it could mark a turning point, it comes at a price. And it doesn't address Spain's wider economic problems, says Patrick Armstrong from Armstrong Investments. SOUNDBITE: Armstrong Investments Partner, Patrick Armstrong, saying (English): "You've still got the property bubble that's still collapsing there, you've got 20% unemployment, and these big banks don't have funding levels that are competitive with German banks and American banks." Teachers and students from Madrid's Complutense University protested against education cuts. The bank crisis has pushed Spain close to a sovereign bailout as the government struggles to stay afloat. And with thousands more bank job losses to come, many more people may be joining these students on the streets.