Madrid was dealt a double blow yesterday after it emerged that almost €100bn in capital had left the country in the first three months of the year and the head of the European Central Bank lambasted its handling of Bankia, the troubled Spanish lender.
Data published by Spain’s central bank showed €97bn had been pulled out in the first quarter – around a tenth of the country’s GDP – as concerns mounted over Madrid’s ability to contain its twin economic and financial crises, which have forced government borrowing costs to euro-era highs.
The data seemed to corroborate earlier assessments from economists that foreign investors were selling Spanish assets, while Spanish banks were increasing holdings of domestic bonds, helped by cash accessed through the ECB’s three-year liquidity operations.