Sunday

21st Oct 2018

Spain's football clubs cause stir in Germany

  • Spain won the World Cup in 2010 (Photo: kosmoseleevike)

In a sign of how much EU states influence one another’s affairs in the current eurozone crisis, Spain pulled back from allowing debt relief to its football clubs in reaction to German disapproval.

Spain last weekend suggested that its top football clubs may not have to pay back their multi-million debt, just as Madrid has secured more breathing room from eurozone partners for its deficit targets.

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Secretary of State for Sport Miguel Cardenal told Marca sports daily that the government was looking at ways to wipe off the football clubs' debt of €750 million they owe the state in unpaid taxes. Clubs like Real Madrid and Barca also owe some other €600 million in social contributions.

He said he was planning "make this debt disappear within a reasonable time frame."

But the reaction was swift in Germany.

Bild's sports page on Tuesday ran with the headline "Will German taxpayers eventually have to fork out for Messi and Ronaldo?" Lionel Messi receives €2.5 million a month from FC Barcelona, while Cristiano Ronaldo earns over €1 million a month from Real Madrid.

And German MEP Elmar Brok, a close ally of Chancellor Angela Merkel, told the same paper that he will ask the EU commission to ask the Spanish government for an official reaction. "Debt restructuring means state aid and violates competition rules. The EU commission has to look into it," he said, encouraging German football clubs to file complaints.

Bayern Munchen's chief Uli Honess told Die Zeit that such a tax amnesty would be "unthinkable" and "a blow" to other football clubs. And Hans-Joachim Watzke from Borrusia Dortmund said he would have "zero understanding" if the Spanish government pulled this through.

According to a study by Barcelona university, some 20 top football clubs in Spain owed the state some €3.5 billion in 2010, mostly due to having hired expensive foreign players. More than a dozen clubs are in insolvency procedures and some have already gotten tax amnesties from the regional governments.

On Thursday (16 March), Cardenal made a u-turn and said the football clubs' debt would no longer be wiped from the books.

"We are working to provide a solution to the problem. What the government can offer are policy instruments so that the clubs can cope with this situation, but neither will forgive the debt or provide more subsidies, "

Earlier this week, member states agreed to let Spain lower its budget-reduction targets for this year after Madrid complained that it would not manage make the previous targets amid an unpredicted recession.

The concession came after a meeting between the Spanish and German finance ministers, with Berlin keen to see the EU's revamped budget rules strictly adhered to.

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