Rodrigo Rato, from bad government to corruption
Brain behind the PP during the boom years in Spain, and leader of IMF before the financial crisis, toppled
The arrest of Rodrigo Rato represents many things. The economic brain of the Aznar administration has fallen: he was the man who led the policies of the Spanish right (1996-2004) riding on the wave of the real estate bubble. Aznar designated him as "his natural successor", though in the end he chose Rajoy. The Spaniard who has occupied the most important international economic post has fallen: he was the Managing Director of the International Monetary Fund (IMF) from 2004 to 2007, when he left suddenly. His time at the IMF was later criticized for having ignored the symptoms of the worst international financial collapse since the Great Crash of 1929. Also fallen is the man who, on returning to Spain, led the creation of Bankia in 2010 from Caja Madrid; he abandoned Bankia in 2012 in the midst of a general failure that almost led to the financial intervention of Spain. Bankia, and the whole banking system behind it, had to be bailed out. That is when the decline of the PP politician, the economic brain behind the Spanish easy-money boom, began.
The fall from grace reached its culmination yesterday. Rato was arrested after a complaint from the prosecutor’s office, which reports to the government led by his former colleagues from the Popular Party (PP), with Cristóbal Montoro, a Rato disciple, as Finance Minister. The PP, facing an electoral cycle, has left him to his own devices. Until now he had been treated with a delicacy that the Spanish government does not apply in other cases, not by a long shot. Just look towards Catalonia. The man who had been the great hope and a benchmark of success for the PP is today a black stain.
Investigated up to now for irregularities in Bankia’s flotation and for the scandal of the “black” credit cards (1), he is now faced with additional charges of fraud, concealment of assets, and money laundering. Rato, one of the most powerful Spanish politicians in the last decades, has been cornered by the law. He could not leave a worse legacy: in his years of political and banking responsibility, the grave economic crisis that we are suffering now was incubated and, furthermore, those were the years of widespread corruption in Spain. In Rato a symbol of bad governance and the absence of ethics has fallen.
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(1) N.T. Rodrigo Rato and several other top Caja Madrid executives were issued credit cards which they regularly used at their discretion to pay for their own personal expenses.
