Is a corralito possible in Spain?

es-posible-un-corralito-en-españa
8 min read

The crisis that the world is going through has a notorious impact on the Spanish economy and suspicions about a possible corralito in Spain are increasing by leaps and bounds.

Is it really possible for this to happen? In this article we will review which are the issues that increase fears and which are the ones that should bring peace of mind to the Spanish people.

Warning: this article is not suitable for cardiac or political idolatry patients (both right and left). The aim is to offer an approach to the subject that will help the people to foresee possible future outcomes.

As we do in promoting cryptos from Bitnovo, our purpose is to help people find alternatives to the traditional financial and political systems that have done us so much harm over the years.

¡So… go for it!

What is a corralito?

A corralito is a temporary restriction imposed by the government in which it prohibits its citizens from accessing funds deposited in banks.

The aim of this imposition is to prevent a large number of people from withdrawing their savings at the same time, causing the banking system to collapse.

History of the corralito

The term “corralito” emerged in Argentina in 2001 under the mandate of Fernando de la Rúa. At that time the country was going through a brutal economic and political crisis and the people were taking to the streets under the slogan ” Let them all go “.

Such was the crisis, that that same year Argentina got to have 5 different presidents in one week. Yes, in one week.

One of the economic measures imposed by President De La Rúa was to restrict the free disposal of fixed-term cash, current accounts and savings accounts.

The first “corralito” in history lasted from December 3, 2001 to December 2, 2002. A year of prohibition of access to funds. A real madness.

The word “corralito” alludes to a corral like the one used to keep animals from escaping. Although here the only animals were politicians and banks, and the corral did not allow the people to use their own money.

From then on, this term has been used in all Spanish-speaking countries to refer to this immobilization of deposits carried out by the governments of various countries.

es-posible-un-corralito-en-españa

An Argentine protester throws stones during the 2001 “corralito” protests. Will it happen in Spain?

Recent Corralitos in European History

 2013 – Corralito Cyprus

The government of this country limited the possibility for Cypriots to withdraw money from banks.

Cyprus was in the midst of an economic crisis since 2012 and the Eurozone prepared a 10-billion-euro rescue to avoid bankruptcy. But this was going to have its consequences and, as always, the people would have to pay for it through different measures, such as

– The banks would not return part of the money to their shareholders.

– Deposits over 100,000 euros would pay an extraordinary tax.

– A capital control was imposed that did not allow money to leave the country and to be withdrawn from ATMs.

2015 – Corralito Greece 

On June 29, the Greek government announced the blockade of all bank deposits and the closure of bank offices.

The main objective was to avoid banking panic or massive withdrawal of deposits before the holding of the referendum on the proposal of international creditors called by President Tsipras.

The exit of money abroad was also restricted, the withdrawal of money was limited to only 120 euros a day and the Athens Stock Exchange was even closed.

It took 4 years for the Greeks to do what they wanted with their money again. It was 50 long months of corralito and government authoritarianism.

Possibility of having a corralito in Spain

It is true that regions such as Latin America or Eastern Europe have proven to have more unstable economies than Spain, but since 2008 it has been clear once again that financial systems are failing for everyone.

It’s no coincidence that in 2008 (with the crisis caused by the collapse of the real estate bubble) Satoshi Nakamoto published the Bitcoin paper that announced the creation of the first crypto in history.

The financial system has demonstrated its failure on multiple occasions, always condemning the most vulnerable to pay for the failures of the most powerful.

It is common knowledge that currently banks are going through a serious crisis worldwide with the appearance of the COVID-19 and Spain is one of the most affected nations.

In this context, a recent tweet from Daniel Estulin, two-time winner of the International Journalism Prize, has revealed a bleak picture of Spain’s finances in the coming months.

“Spanish government is willing to freeze bank accounts obviously. We have already seen it in Cyprus. I repeat: get your money out of the banks now!

According to this source, Pedro Sanchez’s government would be willing to freeze the bank accounts of the Spanish people due to the lack of collection in the Treasury and the financing problems with the European Union.

And the Spanish constitution could be used to justify such an atrocity, since as Pablo Iglesias has once quoted on his Twitter account, Article 132 of the constitution states

“All national wealth is subordinated to the general interest”.

And as has been demonstrated on multiple occasions, it is politicians who decide what that “general interest” is.

Similarities between the Argentinean corralito and the situation in Spain

Let’s make a comparative analysis between the situation of 2001 in Argentina and the Spanish 2020. In that tragic Argentine December four things happened:

– Corralito: prohibition to take money out of the banks.

– Inflation: hidden taxes.

– Devaluation: people who had deposits in dollars were able to withdraw their funds at a third of their value.

– Default: The state decided not to pay the Argentine public debt.

It does not seem that a similar situation can be generated in Spain, at least in the short term, but it is true that we have already experienced notorious tax aggressions to citizens: tax increases and inflation (which is also a tax).

How to avoid a corralito

Do you want to know how to avoid the corralito? Unfortunately, it is not in our hands to avoid it, although we can prevent that corralito from stealing our money.

I in particular (and having lived in Argentina), would keep my money as far away from the banks as possible and as close as possible to the crypto currencies.

Dare to buy bitcoins or other crypts that allow you to own your money without leaving it in the hands of bankers and politicians, who have shown their bad intentions and ineptitude on hundreds of occasions.