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GALICIA

An Aussie in Galicia: Discovering that bureaucracy is Spain’s national sport

This week, Heath Savage, who moved from the Sydney suburbs to rural Galicia, discovers the challenges of Spanish bureaucracy.

An Aussie in Galicia: Discovering that bureaucracy is Spain's national sport
File photo of a council office in Spain. Photo: AFP

“Spanish is The Loving Tongue”, sang Bob Dylan in 1973. It was always, to my ears, a more romantic, sensual sound than French, which I learned to speak reasonably well during my years working in Belgium, as a chef and bar manager. Spanish, or, as we have learned to call it in our new home, Castellano, sounds no more like Gallego than Italian sounds French.

Castellano is the tongue in which we have conducted all of the documentation and processes required to make our dream a reality. Documentation – completion and discussion of – is, we discovered, the national sport.

On May 20th 2018 we flew to Santiago de Compostela, which sits 114km north-west of our village, to view the house we had decided, from our study in Sydney, to purchase.

Yes, it sounds mad. You buy books online, not houses! We did not commit until we had a building inspection, and a full report by architects. The Registro de la Propiedad and Cadastre were also inspected by a property lawyer. We were told that  usually people just use a gestor, but we are thorough types, and we opted to spend some money on research rather than buy blind and find, beyond the point of no return, that we had fallen foul of the infamously complex Galician property laws, or that the house required more renovation than was evident on amateur inspection.

That trip back in May was all about matching the dream with the reality. Reality meant legal necessities: obtaining a Número de Identidad de Extranjero – identification number for foreigners – and opening a Spanish bank account. These are chores that require patience, and dozens of photocopies of passports/ID/Birth Certificates, as well as numerous unflattering, unsmiling photos of self.

We arrived like new kids at school, with a neat folder all ready to go. That old “castaña” – all Aussies are descended from convicts – is always a conversation-stopper when we meet expats from other countries. That said, in my new photos, all that was lacking was a jacket covered in little black arrows and a number in front of me.

I had read a few expat rants that complained of how labyrinthine Spanish bureaucracy is, and how unhelpful its bureaucrats; as if encountering government departments and their snarling, slavering gate-keepers is a joyous experience in any country!

Rubbing up against a jobsworth in Australia, the UK, or anywhere else, is usually an unpleasant necessity. Government employees are bred in small cages on factory farms. They have their sense of humour removed surgically by HR before being leashed behind a desk and given a computer.

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Photo: Billiondigital/Depositphotos

We took deep breaths and bashed on. We were dropped at the police station in Monforte the day after we landed, jet-lagged after a 30-hr non-stop journey. The mission: obtain an NIE each. We took a number, we sat down. We were summoned after ten minutes. The young lady who suffered our Google-translated Spanish, sorry, Castellano, smiled that smile that we all paint on when someone weird and smelly sits next to us on a long train journey, and we wish they had sat somewhere else.

She processed us promptly. We had to leave the station, pay a fee at a bank, then return to have the requisite rubber stamps applied to our new NIE paper. The man at the bank could not have been lovelier, and even welcomed us to Galicia! On return, our young lady was just leaving for lunch. She spotted us, turned around, sat back down at her desk, and finished the job for us. So, we didn’t have to queue again or re-explain. Job number one done! Not painful at all!

Job number two: open a Spanish bank account. A particular bank was recommended by a Scottish expat. of our acquaintance (If you want advice on banks and money, ask a Scot – they did, after all, invent modern banking as we know it – Alexander Hamilton, Philadelphia 1791).

The word’s most cheerful bank teller greeted us with genuine warmth. She conducted all the necessaries via our friend Google, created our account, and provided us with all that we needed to proceed with the house purchase. We went back in and gave her a box of chocolates next day. Months later, we met her again, sitting behind us in our village church with her mother. Our new world is a small one. We like that.

Fifteen months, on we have registration cards, a Spanish driving license, and social security cards.

At each day’s end we watch the sun set. We have forgotten the form-filling, and the minor frustrations. We wish our passing neighbours “boas tardes”, which trips more easily from our foreign tongues.

READ MORE: Follow the adventures of Heath in Galicia

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MONEY

Rampant branch closures and job cuts help Spain’s banks post huge earnings

Spain’s biggest banks this week reported huge profits in 2021 and cheered their return to recovery post-Covid, but ruthless cost-cutting in the form of thousands of layoffs, hundreds of branch closures and the removal of many ATMs have left customers in Spain suffering, in this latest example of ‘Capitalismo 2.0’. 

A man withdraws cash from a Santander branch in Madrid.
More than 3,500 Santander workers lost their jobs in Spain in 2021 and a further 2,000 more employees working for Santander across Europe were also laid off. Photo: PHILIPPE DESMAZES / AFP

Spanish banking giant Santander on Wednesday said it has bounced back from the pandemic as it returned to profit last year, beating analyst expectations and exceeding its pre-COVID earnings.

Likewise, Spain’s second-largest bank BBVA said on Thursday that it saw a strong rebound in 2021 following the Covid crisis, tripling its net profits thanks to a recovery in business activity.

It’s a similar story for Unicaja (€137 million profit in 2021), Caixabank (€5.2 billion profit thanks to merge with Bankia), Sabadell (€530 million profit last year), Abanca (€323 million profit) and all of Spain’s other main banks.

This may be promising news for Spain’s banking sector, but their profits have come at a cost for many of their employees and customers. 

In 2021, 19,000 bank employees lost their jobs, almost all through state-approved ERE layoffs, meant for companies struggling financially.

BBVA employees protest against layoffs in May 2021 in Madrid. Spain’s second-largest bank BBVA is looking to shed 3,800 jobs, affecting 16 percent of its staff, in a move denounced by unions as “scandalous”. (Photo by GABRIEL BOUYS / AFP)

Around 11 percent of bank branches in Spain have also been closed down in 2021 as part of Spanish banks’ attempts to cut costs, even though they’ve agreed to pay just under €5 billion in compensation.

Rampant branch closures have in turn resulted in 2,200 ATMs being removed since the Covid-19 pandemic began, even though the use of cajeros automáticos went up by 20 percent in 2021.

There are now 48,300 ATMs in Spain, levels not seen since 2001.

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Apart from losses caused by the coronavirus crisis, Spain’s financial institutions have justified the lay-offs, branch closures and ATM removals under the premise that there was already a shift to online banking taking place among customers. 

But the problem has been around for longer in a country with stark population differences between the cities and so-called ‘Empty Spain’, with rural communities and elderly people bearing the brunt of it. 

 

Caixabank laid off almost 6,500 workers in the first sixth months of 2021. Photo: ANDER GILLENEA/AFP

Just this month, a 78-year-old Valencian man has than collected 400,000+ signatures in an online petition calling for Spanish banks to offer face-to-face customer service that’s “humane” to elderly people, spurring the Bank of Spain and even Spain’s Prime Minister Pedro Sánchez to publicly say they would address the problem.

READ MORE: ‘I’m old, not stupid’ – How one Spanish senior is demanding face-to-face bank service

It’s worth noting that between 2008 and 2019, Spain had the highest number of branch closures and bank job cuts in Europe, with 48 percent of its branches shuttered compared with a bloc-wide average of 31 percent.

Below is more detailed information on how Santander and BBVA, Spain’s two biggest banks, have reported their huge profits in 2021.

Santander

Driven by a strong performance in the United States and Britain, the bank booked a net profit of €8.1 billion in 2021, close to a 12-year high. 

It was a huge improvement from 2020 when the pandemic hit and the bank suffered a net loss of €8.7 billion after it was forced to write down the value of several of its branches, particularly in the UK. It was also higher than 2019, when the bank posted a net profit of €6.5 billion.

Analysts from FactSet were expecting profits of €7.9 billion. 

“Our 2021 results demonstrate once again the value of our scale and presence across both developed and developing markets, with attributable profit 25 per cent higher than pre-COVID levels in 2019,” said chief executive Ana Botin in a statement.

Net banking income, the equivalent to turnover, also increased, reaching €33.4 billion, compared to €31.9 billion in 2020. This dynamic was made possible by a strong increase in customer numbers, with the group now counting almost 153 million customers worldwide. 

“We have added five million new customers in the last 12 months alone,” said Botin.

Santander performed particularly well in Europe and North America, with profits doubling in constant euros compared to 2020. In the UK, where Santander has a strong presence, current profit even “quadrupled” over the same period to €1.6 billion.

Last year’s net loss was the first in Banco Santander’s history, after having to revise downwards the value of several of its subsidiaries, notably in the UK, because of COVID.

The banking giant, which cut nearly 3,500 jobs at the end of 2020, in September announced an interim shareholder payout of €1.7 billion for its 2021 results. “In the coming weeks, we will announce additional compensation linked to the 2021 results,” it said.

BBVA

The group, which mainly operates in Spain but also in Latin America, Mexico and Turkey, posted profits of €4.65 billion ($5.25 billion), up from €1.3 billion a year earlier.

The result, which followed a solid fourth quarter with profits of €1.34 billion, was higher than expected, with FactSet analysts expecting a figure of €4.32 billion .

Excluding non-recurring items, such as the outcome of a restructuring plan launched last year, it generated profits of 5.07 billion euros in what was the highest figure “in 10 years”, the bank said in a statement.

In 2020, the Spanish bank saw its net profit tumble 63 percent as a result of asset depreciation and provisions taken against an increase in bad loans due to the economic fallout of the virus crisis.

“The economic recovery over the past year has brought with it a marked upturn in banking activity, mainly in the loan portfolio,” the bank explained, pointing to a reduction of the provisions put in place because of Covid.

In 2021, BBVA added a “record” 8.7 million new customers, largely due to the growth of its online activities. It now has 81.7 million customers worldwide.

The group’s net interest margins also rose 6.1 percent year-on-year to €14.7 billion, said the bank, which is undergoing a cost-cutting drive.

So far, it has axed 2,935 jobs and closed down 480 branches as the banking sector undergoes increasing digitalisation and fewer and fewer transactions are carried out over the counter.

At the end of 2020, BBVA sold its US unit to PNC Financial Services for nearly 10 billion euros and decided to reinvest some of the funds in the Turkish market.

In November, it launched a bid to take full control of its Turkish lending subsidiary Garanti, offering €2.25 billion ($2.6 billion) to buy the 50.15 percent stake it does not yet own.

The deal should be finalised in the first quarter of 2022.

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