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How Corruption Costs Southern Europe

Former International Monetary Fund chief Rodrigo Rato (L, behind) leaves after testifying in a trial at the High Court where he and some 66 executives and former board members of Bankia and its founding savings bank Caja Madrid are accused of illegally spending 12 million euros ($13.48 million) for personal use on so-called "black cards" between 2003 and 2012, in San Fernando de Henares, outside Madrid, Spain, October 4, 2016. REUTERS/Susana Vera
Former IMF chief Rodrigo Rato leaves after testifying in court outside Madrid where he and 66 former Spanish bank executives are accused of illegally spending €12 million for personal use.
  • Why it matters

    Why it matters

    Despite legal reforms and a rising number of cases going to trial, South European countries are still being held back corruption. Studies show that more corruption means less investment, and therefore lower economic output.

  • Facts

    Facts

    • The Spanish bank Bankia had to be rescued from insolvency in 2012 with €22 billion in European financial assistance.
    • The Spanish Antitrust Agency estimates that awarding public contracts to friends of politicians costs the country €48 billion per year because of lack of competition among bidders.
    • Spain, Greece and Italy rank in the bottom third of Transparency International’s corruption perception index.
  • Audio

    Audio

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Managers and supervisors at the Spanish bank Bankia had a good life. They were issued company credit cards to send with apparently no monitoring.

On a single day in March 2011, Bankia’s former chief executive Rodrigo Rato, previously Spanish economics minister and head of the International Monetary Fund, used his card to buy alcoholic drinks worth €3,547. Altogether he charged €99,000 to the card.

His predecessor, Miguel Blesa, used his card to spend €9,000 on a single night at the Ritz Hotel.

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