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Spain sells failed bank for a pittance

Spain has sold the country’s ‘failed’ Catalunya Bank for just €1.2 billion ($1.62 billion), racking up nearly €12 billion losses in the deal, or around the same figure as that saved by the government with its austerity cuts. Catalunya Bank, a victim of Spain’s economic crisis, has been sold to BBVA, the country’s second-largest bank. BBVA beat out competitors Santander and CaixaBank to buy the bank which received €12.5 billion in rescue funds. For BBVA, the sale means a greater presence in Catalonia’s dynamic market, the bank said in a statement. But the sale will mean that the government, which owns a 66% of the bank, lost €11.8 billion by propping up the bank which teetered when thousands of borrowers defaulted on their loans. That is close to the €13.8 billion in cuts to education and healthcare imposed by the Spanish government in its austerity drive. Spain will now turn its attention to selling off another failed bank in Bankia.

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