The electoral advance will force political parties to mobilize urgent financial resources to be able to pay for a decisive campaign. The PSOE and the PP are two formations that resort to bank loans as a method of financing while others, such as Sumar, Vox and ERC, are self-financed with their own resources or by resorting to collaborative campaigns between their affiliates and sympathizers Ahead of the elections on July 23, the big banks have tightened the terms of their credits and will grant them at market conditions and, in some cases, have incorporated demanding and reinforced internal codes.
Socialists and populists have historically used bank credits to cover their electoral expenses. The main financier of bipartisanship, through successive campaigns, was Banco Popular. An office located a few meters from the Congress of Deputies served as the epicenter of the business. It was an initiative of the historical president of the entity, Luis Valls-Taberner. The banker considered it appropriate to contribute financial resources, in a transparent manner, to the electoral campaigns of political parties and then, with the subsidies for their results, recover the money advanced. With the purchase by Santander, this activity was reduced and the entity chaired by Ana BotÃn tightened the financing conditions.
Banco Santander will launch a new “funding policy for political parties” this election campaign. According to the entity’s document, drawn up in 2020, after the last general elections, the granting of credits to the PSOE and the PP “will be considered exceptional and will be done with a restrictive nature, having to be approved or, in the case of operations from of the subsidiary entities, validated by the Santander Group’s executive committee, which can only authorize it under market conditions”. Santander cannot grant them “total or partial remissions”.
BBVA explains that funding requests for political acronyms must pass a risk analysis and that credits are always granted under market conditions. It refers to its code of conduct and appeals to “political neutrality” and “respect for pluralism”. CaixaBank states that it does not grant loans to political parties.
The PSOE and the PP are currently designing their campaign strategies, where they will hold their meetings, where their leaders will travel, what type of means of transport they will have to hire and who their suppliers will be. When they have a budget, the two formations plan to turn to the banks to request the necessary financing.
They will therefore do so under tougher and, moreover, unfavorable conditions, especially since interest rates have risen sharply in the last year, which makes debt more expensive.
Recourse to bank credits has generated a debt that the two main parties have had to pay off in recent years. Each case is different. The last data published date from the end of 2021, when the Socialists had a financial debt of almost 20 million euros and the Popular, of almost 18 million.
Both formations reveal the type of debt they have contracted and the maturity period. In the case of the PSOE, the loans pending repayment by the party at the end of 2021 affected agreements with Santander, BBVA, Caixabank (some inherited from Bankia), Liberbank, Unicaja or Abanca. In the case of PP, the loans were contracted with entities such as Santander (some as a result of the acquisition of Popular), BBVA and Unicaja, or old savings banks such as CAM or Caja Duero. A credit of 37 million euros granted by Banesto, of which Génova still owes 10 million, also stands out.
Most of the loans are granted at over 2% interest, although some, in the case of the PSOE, reach 4 and 5%. The amortization period reaches up to 35 years.
