Spain Paying Bankers to Play Golf

Spain’s economic conditions have prompted  Zapatero’s gov’t to adopt austerity measures that include the freezing on pensions and a 5% reduction of civil servant’s salaries. But in a clear contradiction with the austerity message Spain’s central bank is about to pay more than 10 billion euros ($12.9 billion) to merge the country’s savings banks. The process, which is being presented as part of a series of economic measures aimed at curbing the country’s gaping deficit and national debt, may push 50,000 bank workers into early retirement and a life of pensions.

Bloomberg points out that the process of consolidating Spain’s lenders means paying bankers to play golf.

A spokesman for labor policy at Convergencia i Unio, a pro-business Catalan party, referring to the prospect of the mass early retirements said the merger “Goes against the official message that people should actually work longer before retiring.”

Bberg: “The cajas [lenders] have long used early retirement to pare the workforce, a process that has been good for employees if expensive for the banks. Since a rule change in 2004, banks have had to charge their cost directly to earnings.

Ignacio Barragan, 64, has spent much of his time playing golf and tennis since retiring at 54 from Caja Madrid in 1999 after a 33-year career that took him to the rank of regional director. He’s been earning 100 percent of his salary ever since and expects his income to drop about 25 percent when he starts drawing state and private pensions in August.

“I chose to enjoy my hobbies and economically there was no obstacle to doing that,” Barragan said in a phone interview. “For me it was a great solution.”

The combination of Caixa Catalunya with Caixa Manresa and Caixa Tarragona, two other Catalan cajas, will allow workers 56 to 59 years old at get 85 percent of their salary plus a lump sum of 31,000 euros if they stop working.”

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