* Bank bailout leads to criticism of PM Rajoy
* Rajoy, accused of cowardice, says has gained credibility
* Sticks with weekend football match plan
By Fiona Ortiz and Tracy Rucinski
MADRID, June 10 Confused and anxious Spaniards
heaped scorn on Prime Minister Mariano Rajoy on Sunday for
portraying a 100 billion euro European rescue of the country's
zombie lenders as a triumph, expressing scepticism about whether
the plan will work.
With the economy contracting, one in four workers out of a
job, and Greek elections next weekend overshadowing the entire
euro zone, Spaniards accepted that Saturday's announcement of
the bank rescue was necessary but many doubted it would solve
the problems of Spain or the euro.
Some commentators were willing to give Rajoy the benefit of
the doubt as Spain became the fourth euro zone country to seek
international aid in the two-and-a-half-year debt crisis.
However, others were less forgiving, while online many
Spaniards accused him of cowardice and expressed astonishment
that he had gone off to watch Spain play in the European
football championships on Sunday.
Rajoy avoided calling the deal agreed by euro zone finance
ministers a "rescue" - even though every leading Spanish
newspaper called it just that on Sunday - apparently because
this would imply the kind of humiliating conditions and
surveillance by European officials that Ireland, Greece and
Portugal have endured under their bailouts.
Instead he referred only to "what happened yesterday",
saying that the deal to shore up banks hit hard by a burst
property bubble and recession had no strings attached and would
return credibility to the euro.
"Getting a 100 billion credit line is not such an easy thing
to achieve," Rajoy told a news conference.
Xavier Vidal-Folch, a columnist at the El Pais newspaper,
remained sceptical. "People need to know this isn't free. Rajoy
is not Saint George killing the dragon," he said. However, he
told Reuters: "The deal can be very positive if he explains to
Spaniards there are still a lot of chores to do."
Traditional and social media blasted Rajoy for not
announcing the rescue himself on Saturday - instead putting his
economy minister in the firing line - before getting on a plane
to see Spain play Italy in Poland on Sunday.
"Rajoy makes himself out to be the saviour of the euro and
parades the pressure tactics he used to get us this marvellous
gift of a tailor-made rescue," wrote El Pais editor Lluis
Bassets in an online opinion piece on Sunday.
With Spain's borrowing costs soaring and making it
impossible for the government to raise enough money to help the
banks itself, Rajoy said he had pressured Europe for the aid -
contradicting reports that the euro zone had pressured him into
the deal to try to stop the euro zone crisis deepening.
Adding to the wider turmoil, Greece will hold an election on
June 17 that could decide its future in the euro, with voters
split over that country's international bailout which has kept
the economy afloat at the price of harsh austerity measures.
A series of halfhearted Spanish banking reforms have failed
to remove doubts about the financial sector.
Rajoy blamed the previous Socialist government, saying it
should have taken more vigorous action on the banks three years
ago, when most of euro zone countries bailed out their lenders.
The leaders of Ireland and Portugal did not last long in
office after their countries took bailouts, while Greece's
George Papandreou was also eventually forced out after his
Rajoy's televised news conference drew derision from
incredulous Spaniards who have already paid 18 billion euros in
public money to prop up banks after the 2008 property market
crash left them with hundreds of billions of euros in bad debt
to real-estate developers.
"And who is going to pay the interest on these credit lines
(for the banks)?" said Pedro Arranz, a primary school teacher.
The answer was not clear. Rajoy said interest on the euro
zone loans would not count toward Spain's deficit, but Economy
Minister Luis de Guindos said a day earlier it would.
Arranz and 30 others in the waiting room at a Madrid
hospital jeered Rajoy as he spoke on television, emphasising
measures taken by his government to tackle the banks' problems
since it came to power late last year.
"If we had not done what we've done in the past five months,
what would have been on the table yesterday would have been an
intervention in Spain," Rajoy told the news conference in a
large hall usually reserved for receiving heads of state.
Lourdes Jimenez, a 37-year-old business owner who also
watched Rajoy from the hospital waiting room, doubted the deal
will free up credit for small firms which have been choked for
years as the banks try to recover from the property bust.
"This is all a whitewash. And meanwhile the banks continue
to asphyxiate small businesses, buying government bonds instead
of lending to us," Jimenez said. Lending to businesses in Spain
has dropped drastically since 2008.
Immediately after de Guindos announced the aid package on
Saturday, Twitter exploded with criticism of Rajoy, with
#rajoycobarde (rajoycoward) one of the top trending topics in
Spain. On Sunday the top trending topic was #PreguntaParaRajoy
"When are they going to rescue the unemployed? And the
people evicted by the banks?" tweeted one person. After the
construction industry collapsed in 2008, throwing hundreds of
thousands out of work, defaults on home mortgages have risen as
have court-ordered evictions.
The Socialists, the main opposition party, said on Sunday
they doubted the aid would come without hefty conditions and
called on Rajoy to appear before parliament to explain the
rescue. "The government is trying to make us believe we won the
lottery," Socialist leader Alfredo Perez Rubalcaba said.
JUST PART OF THE PROGRAMME
Rajoy has been applauded in Europe for steep cost-cutting to
bring down the country's high budget deficit, and for a series
of reforms to improve economic competitiveness, such as cutting
statutory severance pay.
He said the European credit line was part of his wider plan
to put Spain back on track to economic growth and jobs creation.
A lawyer who represents small bank shareholders welcomed the
rescue. "It's positive news, as it will ensure the solidity of
the banks ... and recover the confidence of the markets," said
Javier Cremades, of law firm Cremades & Calvo-Sotelo, who is
also the secretary general of the Spanish Association of Small
Shareholders in Public Companies.
But Rajoy, by saying Spain got better treatment than Greece,
Ireland and Portugal, aroused anger in other countries.
"To present this as some better deal for Spain is just not
right," said the Irish deputy finance minister Brian Hayes.
"There will be monitoring by (international institutions).
The cost of the money is the same in both cases, and crucially
the money will be on the balance sheet of Spain in the same way
that it is on the balance sheet of Ireland for our
recapitalisation," he said. "There was no great dramatic