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HISTORY

Why Spain is still in the wrong time zone because of Hitler

As Spain again prepares to put the clocks forward on Saturday night, we look at the fascinating reasons why the country has been in the wrong time zone for the last 75 years, the possible effects of this historical blip on Spanish society, and why there's still no sign of it changing.

Nazi leader German Chancellor Adolf Hitler (R) shakes hands with Spanish Generalísimo Francisco Franco at Hendaye train station on the French-Spanish border in October 1940. (Photo by AFP)
Nazi leader German Chancellor Adolf Hitler (R) shakes hands with Spanish Generalísimo Francisco Franco at Hendaye train station on the French-Spanish border in October 1940. (Photo by AFP)

Why is Spain in the wrong time zone?

Madrid lies directly south of London. Spain is geographically in line with the UK and Portugal. It makes sense, then, that Spain was in the Greenwich Mean Time (GMT) zone until around 75 years ago.

But that all changed in 1940. With Nazi Germany occupying Belgium, Holland, and recently invading France, Spain’s own facist dictator, Francisco Franco, travelled to the French border to meet with Hitler, the man he and many other believed would go on to dominate Europe.

The momentum was clearly with the Nazis, at the time, and Italy had already pledged its support to Hitler. Although he wanted the same from Spain, Franco, however, didn’t have much to offer. With the country ravaged by its own recent Civil War – in which Franco’s victory was heavily supported by Hitler –  Franco felt obliged to make a gesture of some sort.

Although ultimately remaining neutral in the war, Franco decided to show his support for Hitler by agreeing to put Spain’s clocks forward by an hour in an act of solidarity with Nazi Germany. 

Spain has remained in the Central European Time zone ever since, in line with countries as far east as Poland. That means that Madrid currently has the same time as Warsaw in Poland 2,290km away but is one hour ahead of Lisbon which is only 502 km away. 

The consequences of Spain being in the wrong time zone

But Franco’s decision all those years ago isn’t just a quirk of Spanish history, or testament to the extent to which the legacy of that period still looms over Spanish society, it was a decision that, experts say, has had a lasting impact on Spanish culture and society that underpins everything from Spaniard’s sleep cycles and meal times to the country’s birth rates and economic growth.

In recent years there have been calls to make the switch back to GMT because many believe the time zone quirk is affecting Spaniard’s productivity and quality of life. In 2013 a Spanish national commission concluded that Spaniards sleep almost an hour less than the European average, and that this led to increased stress, concentration problems, both at school and work, and workplace accidents.

Some experts believe this explains the Spanish dependence on siestas – that is, that the lack of sleep makes them necessary – but in reality the siesta has been a consistent feature of Spanish life for centuries for many of the same reasons it still is today: in southern Spain, the fierce summer temperatures make it necessary to stay at home during the afternoon. 

Spain's most famous clock is the Puerta del Sol in central Madrid. Photo: Jorge Franganillo/Flickr
Spain’s most famous clock is at the Puerta del Sol in central Madrid. Photo: Jorge Franganillo/Flickr

One effect of the siesta however is that the break in the day means Spaniards work the most hours in Europe yet at one of the continent’s lowest levels of productivity. A lack of sleep contributes to siesta taking which, in turn, means Spaniards work later into the evening and could partly explain Spain’s notoriously nocturnal lifestyles and late meal times. 

Despite the country running on CET, Spaniards’ eating patterns roughly mirror GMT. Many Spaniards eat lunch at what would be 1 or 1.30pm in London (the traditional 2 or 2.30pm in Spain) and dinner at a reasonable 8pm in London (but 9pm or even 10pm as is customary in many parts of Spain).

Making the change and returning to GMT would, according to Nuria Chinchilla, professor at Spain’s IESE business school, help Spaniards “return to the natural order of our circadian rhythm (our 24-hour physiological cycle) that goes with the sun… and the sun in Greenwich, not Germany”.

“If we don’t (change to GMT) we lengthen the day, eat very late and then don’t sleep,” she added.

Why hasn’t Spain moved to the right time zone yet?

The debate about which time zone Spain belongs in was reinvigorated following recent proposals at the EU level to scrap entirely the daylight savings custom. 

In 2018 the EU Commission announced a proposal to abolish the custom after polling showed that 80 percent of Europeans are in favour of staying permanently on summer time.This debate naturally had many in Spain wondering about whether they were in the right time zone.

But owing to a combination of the COVID-19 pandemic, Brexit, and various other bureaucratic difficulties, the proposal was shelved. Member states cannot decide unilaterally on the question of daylight savings, but they can decide which timezone they want to be in. 

Spain has had various commissions over the years exploring the impact of daylight savings and timezones, but no concrete proposals over a return to GMT have ever been made, despite the benefits experts claim it could bring.

Although the government’s focus has been drawn by more pressing issues in recent years – and the issue of time and daylight savings shelved at the European level – expect discussion of whether Spain is actually even in the right time zone this weekend when the clocks do go back, or if the linked issue of daylight savings is eventually taken off the shelf at the European level.

Article by Conor Faulkner

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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.

READ MORE:

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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