MADRID—Spains new central bank chief said the bank failed to act swiftly after the countrys housing market crashed half a decade ago, a rare show of self criticism of national institutions that comes as Spain enters the last stretch of negotiations on the details for a banking bailout.

Luis Maria Lindes speech in Parliament on Tuesday was his first significant statement since he was appointed by conservative Prime Minister Mariano Rajoy a month ago, replacing Miguel Ángel Fernández Ordóñez , a Socialist appointee.

It also is an indication that Spains political elite is starting to come to terms with the unexpected collapse of what was once called the Spanish miracle, largely driven by mounting problems in a banking system that many had once hailed as one of the worlds strongest, even after the 2008 Lehman Brothers bankruptcy.

Senior Spanish officials, faced with growing popular resistance to more austerity cuts, until now sought to pile pressure on European Union institutions to do more to help the euro zone’s fourth largest country.

Spain (we/ˈspeɪn/ SPAYN; Spanish: España, pronounced: [esˈpaɲa] ), officially the Kingdom of Spain , is a sovereign state and a member of the European Union located in southwestern Europe on the Iberian Peninsula.

Spains government bond yields edged up a tad and the euro was softer against the dollar on reports the European Central Bank has advocated imposing losses on holders of senior bonds issued by the most severely damaged Spanish savings banks, marking a sharp turnaround for the central bank.

Finance Minister Luis de Guindos kept up that refrainTuesday, saying at a public event that the EU’s “extremely slow” decision making process is hindering Spain’s recovery.

Relations between the government of Mariano Rajoy and Brussels, as well as some other European governments, have been occasionally awkward since it took office in December.

Mr Rajoy was seen as moving slowly on dealing with a budget deficit, and as having stumbled in its handling of the banking crisis.

The new Spanish prime minister upset fellow leaders when he announced a “sovereign decision” to increase Spain’s budget deficit target for this year, and comments by other Spanish officials about other governments’ duties to Spain have irritated their counterparts.

This was followed by newspaper reports suggesting Italian Prime Minister Mario Monti blamed Spain for heightening Italy’s crisis.

Protests have been held in recent days by employees of ministries, court officials, health workers, firemen and other public workers.

In one protest in the capital Monday, riot policemen removed their protective helmets in solidarity with the crowd.

The government also is grappling with a prolonged economic recession this year, coinciding with major austerity reforms, multilateral aid talks and a banking crisis.

Mr De Guindos, who is spearheading negotiations for a 100 billion ($122 billion) bailout for the property ridden banking system due to be completed after a conference call with his euro zone counterparts Friday, was himself affected by street protests.

Spanish lenders’ net borrowings fromthe European Central Bank jumped to a record 337 billion euros($411 billion) in June as the European bailout agreement failedto ease their access to funding.

He arrived half an hour late to his speaking engagement Tuesday partly because civil servants temporarily blocked main streets, jamming traffic in downtown Madrid.

The finance minister said Tuesday that, just as Germany benefited from flexibility on budget deficits and a favorable low interest rate policy as it emerged from its own crisis in the early 2000s, it is the EU’s turn to be accommodative to the problems of others like Spainhurt by low ECB rates that fed property bubbles until the real estate crash in 2008.

In recent months, Spain has seen its bond yields soar over concerns the country could default on its debt.

Reports that the European Central Bank pushed for senior bondholders to shoulder losses in the Spanish bank recapitalization plan propelled investors to insure against potential losses on bonds issued by the country’s banks Monday.

The ECB has intervened in secondary bond markets in the past when Spain and Italy bond yields have risen to critical levels.

Mr Linde, who is Spain’s only member of the ECB’s governing council, said it is “not impossible” that the central bank could reactivate the bond purchasing program, but that such a measure wasn’t “strictly necessary right now.”.

The chairman said the reduction in the unemployment rate in coming months seems likely to be frustratingly slow, while stressing that the central bank is committed to take further action to boost the recovery without identifying specific measures.

Mr Linde said the central bank’s failure to stem rising debt levels and deteriorating balance sheets is among the reasons for the loss of investor confidence in the country’s banking industry.

Spain’s new central bank chief said his predecessor failed to act swiftly after the country’s housing market crashed half a decade ago, a rare criticism that comes as Spain enters the last stretch of negotiations on the details for a banking bailout.

“The loss of confidence in our banking system cannot be blamed exclusively on the global economic downturn, on problems in the euro zone… or on our own recession,” Mr Linde told a parliamentary committee.

But the ECBs shift may be a sign that the tides are turning on the issue, as the euro zone embarks on a fundamental overhaul of the way bank failures are dealt with within the currency union.

Mr Linde offered few clues about the Bank of Spain’s roadmap to fix the banking sector over the next few months, when the first batch of EU funding will be available, but indicated the sort of mistakes he wants to avoid.

He said former central bank chief Fernandez Ordonez acted “with little determination or insufficiently or inadequately” in several regards.

He also faulted the bank for allowing so called virtual mergers of ailing savings banks instead of full mergers, which he said contributed to delaying key decisions and restructuring efforts.

The Bank of Spain also was “too timid” in forcing banks to create buffers against potential losses on loans during the construction boom.

In Spain, in any case, larger banks are expected to continue operations after restructuring and wouldn’t have been affected.

More recently, the bank failed to foresee the double dip recession Spain fell into earlier this year, he added.

“Looking at what happened with the information that we have today, we have to recognize that at the Bank of Spain we didn’t succeed in what we now call macroprudential supervision,” Mr Linde said.

Alexandra Zucchi is a business journalist based in Hobart, Australia. Alexandra has a passion for financial markets and breaking news stories and loves writing about business news, stock market, and economic opinions that matters most to its audience. Alexandra spends a lot of time discovering and researching latest financial markets and industry news stories in order to make sure the latest and greatest stories are brought to you first on BigBoardNews.com.