Once job cuts have reached nationalized savings banks, the three that belong to the second group of banks, BMN, Caja3 and España-Duero, will begin to plan their restructuring processes. The Ministry of the Economy has told managers from these banks to apply labor reforms that put new severance policies limited to 20 days per year of work with a limit of 12 monthly payments.
The message confuses these savings banks, because they received public funding but were not technically nationalized. The four banks that belong to the first group were nationalized, and they have already planned to reduce payroll in accordance with nationally-mandated labor reforms. Further, the Commissioner of Competition Joaquín Almunia made it clear that the EU was not going to enforce labor reforms. The nationalized Bankia has found a way to provide its employees with conditions that are better than what the law requires. It is considering 30-day severance packages with a maximum of 22 monthly payments. Banco de Valencia will consider a similar plan. The key to understanding this seeming contradiction is to see that what the EU really wants is for the banks to meet new annual spending requirements. In order to do that, Bankia has chosen a method that will allow them to create relatively better severance packages, more evenly distributing sacrifices between those that have to leave and those that stay on at the bank.
The workers who keep the jobs will see their salaries cut significantly. Independent of the negotiations within each lender, both the EU and Spain should make sure that financial reforms are carried out and that taxpayers do not have to pay one euro more to make sure that the banks meet their requirements.
