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CORRUPTION

Ex-IMF chief found guilty of embezzlement will NOT go to jail

Spain's anti-corruption prosecutor on Friday allowed former IMF chief Rodrigo Rato to remain free and without judicial supervision despite a jail sentence of four years and six months for embezzlement.

Published: 3 March 2017 19:31 CET
Ex-IMF chief found guilty of embezzlement will NOT go to jail
Rodrigo Rato being led away by police during a raid at his office. Photo: AFP

Rato, who is also a former Spanish economy minister, will now remain at liberty until the court rules definitively on his case.   

Rato was sentenced on February 23 for misusing funds when he was the boss of two Spanish banks.

He was tried with 64 other former executives and board members, accused of misusing €12 million ($12.7 million) between 2003 and 2012. He is expected to file an appeal.

The case caused an outrage in Spain, where it was uncovered at the height of a severe economic crisis that left many people struggling financially – made all the worse because Bankia later had to be nationalised.

Pending a final verdict, the anti-corruption prosecutor did not ask the National Court hearing the case to take Rato into custody.   

Rato's behaviour during the trial “was completely appropriate”, the National Court said, adding that it saw “no need for precautionary measures”.    

Only one banking union, the CIC, urged the court to jail Rato immediately.    

READ MORE: Ten Spanish corruption scandals that will take your breath away

The union had filed a complaint to the court, under a Spanish law that allows organisations and individuals who are not directly linked to a case to do so.

Rato and the other executives were accused of having paid for personal expenses with credit cards put at their disposal by both Caja Madrid and Bankia, without ever justifying them or declaring them to tax authorities.   

These expenses included petrol for their cars, supermarket shopping, pricey holidays, luxury bags or parties in nightclubs.   

Rato, 67, denied any wrongdoing and said the credit cards were for discretionary spending as part of executives' pay.   

In another case that also made waves in Spain, the king's brother-in-law Inaki Urdangarin was also left free without posting bail following his sentence of six years and three months for siphoning off millions of euros.

Rato was economy minister and deputy prime minister in the conservative government of Jose Maria Aznar from 1996 to 2004, before going on to head the International Monetary Fund until 2007.

In October 2015, the judicial authorities confiscated his passport as they investigated him over suspected tax fraud, money laundering and fraud.

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BANKING

Card over cash? Why Germany is seeing a new payment preference

Cash has long been king in Germany, with many smaller retailers refusing to join the rest of the world in adopting contactless payment systems. But card-based payments are on the rise, as recent stats about Girocard use reveal.

Published: 13 February 2024 12:31 CET
Card over cash? Why Germany is seeing a new payment preference

Germany has long been a very cash-based country, occasionally to the dismay of frustrated tourists at the Döner shop.

A few German phrases express the people’s love of physical money. There’s ‘only cash is true’ – Nur Bares ist Wahres. Or Bargeld lacht, literally meaning cash laughs, but used to imply that cash is what’s wanted, similar to ‘cash is king’ in English.

But the classic German preference for cash appears to be evolving, as the use of girocards is growing, even for small transactions.

How are girocards being used?

Girocard, an ATM and debit card service offered by German Banks, was designed to allow customers to use virtually all German ATMs and, increasingly, to make purchases at businesses.

READ ALSO: Ask an expert – Why is cash still so popular in Germany, and is it changing?

Last year, consumers in Germany used their Girocard more often than ever before for cashless payments. A total of €7.48 billion payment transactions with the plastic card were counted – 11.5 percent more than in the previous record year 2022, according to figures published by the Frankfurt-based institution Euro Card Systems.

Whether at the bakery, petrol station or supermarket, customers are increasingly pulling out their cards at the checkout, even for smaller amounts. As a result, the average amount paid with the Girocard fell from €42.34 to €40.69 within a year. 

The rise of card payments in Germany

Contactless payment, which is possible with girocards and credit cards that have an NFC chip, got a boost during the Covid pandemic, as retailers promoted it for hygiene reasons. 

But the use of card payments has continued to grow in Germany since then, boosted partly by the increasing use of girocards.

Promoting the use of girocards, some German banks have expanded their cards’ functions: Sparkassen, Volksbanken, or Raiffeisenbanken offer girocards for the digital wallet, for example.

Banks want to continue upgrading the payment card with further applications. For example, a project is being tested which would add an age verification function to girocards that would be useful when a customer is buying cigarettes.

On the retail side, it’s clear why the Girocard is preferred to other debit options.

“We see that debit cards from international providers cost up to four times more,” Ulrich Binnebößel, Head of the Payment Systems & Logistics Department at the German Retail Association (HDE) told DPA.

What’s the difference between the Girocard and other debit?

The Girocard is a strictly German phenomenon. It can be seen as the latest iteration of the EC card, which was created to consolidate payment systems following the unification of former East and West Germany.

In 1991 different debit card systems, including Eurocheque guarantee cards from former West Germany and Geldkarte ATMs from former East Germany, were unified into Eurocheque cards.

Then in 2001, the Eurocheque system was disbanded, but German banks continued to use the EC logo for “electronic cash’” cards, or EC cards. In 2007, the German Banking Industry Committee introduced Girocard as a common name for electronic cash and the German ATM network.

Girocards are only issued and accepted in Germany, so if you want to get one of your own, you’ll have to join a German bank, and shell out those notorious German banking fees.

READ ALSO: Why it’s almost impossible to find a free bank account in Germany

Alternatively, you can get by with internationally accepted debit cards provided by a bank in your home country, or otherwise by joining an app-based European banking service like N26. 

But be warned, without the Girocard in hand, at some smaller retailers you may be told, “Leider nur Bargeld oder EC-Karte.”

With reporting by DPA

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