http://www.reuters.com/article/2012/06/08/us-spain-banks-aid-idUSBRE8570DX20120608 Looks like Spain is next European domino to ask for a bailout. Next stop Italy then total collapse of the Euro. Going to be stock market turmoil next week.
And now this...... Merkel say's EU are ready to help......Can it really be done...... We may have plenty to read over the long weekend... http://www.reuters.com/article/2012/06/08/us-eurozone-idUSBRE8530RL20120608
A bit more on Merkel...... Take note of the audio link 2/3 down the page and the very last paragraph..... Big day for her and Germany today. http://www.economist.com/node/21556571?scode=3d26b0b17065c2cf29c06c010184c684
100 billion euro's.. nice http://www.bloomberg.com/news/2012-06-09/spain-seeks-125-billion-bailout-as-bank-crisis-worsens.html The markets are going to love it on monday, now that the banks have been bailed.. everything is going to be alright.. hmmmm
That's $125B...... Now the whole EZ is at stake..... The can must be getting very heavy indeed. And on and on it goes..... http://www.guardian.co.uk/commentis...ton-britain-must-stay-in-europe?newsfeed=true
Well it was just on the news...Spain got their bailout....$100B in new loans. Personally I reckon they're going to turn this 'lifeline' into a noose!
SPAIN has secured a European lifeline of up to 100 billion ($126 billion) to save its stricken banks and try to avert a broader financial catastrophe after emergency talks with its eurozone partners. After the hastily organised video conference, lasting more than two hours today, the 17 eurozone finance ministers issued a statement saying they were "willing to respond favourably" to a Spanish plea for help. The deal -- hailed by European economic powerhouse Germany and the United States as well as the IMF -- marks a dramatic climbdown for Spain, where successive governments have hotly denied any need for outside aid. Prime Minister Mariano Rajoy's conservative government finally bowed to pressure from world leaders and, more importantly, the markets, which have sent Spanish borrowing costs soaring. Defying all efforts by policymakers, the eurozone emergency has now spread to the region's fourth-biggest economy -- Spain's is twice the size of those of Greece, Ireland and Portugal combined. "The Spanish Government declares its intention to solicit European financial help for the recapitalisation of those banks that need it," a visibly tense Economy Minister Luis de Guindos told a news conference. Mr De Guindos refused to describe the aid as a rescue deal, which his government had categorically ruled out right up to the last moment. "This has nothing to do with a rescue," he insisted, arguing that the aid would be directed to the 30 per cent of banks with the greatest exposure to the 2008 property market crash. The deal imposed no conditions on the overall Spanish economy, and no new austerity measures, Mr de Guindos stressed. "The only conditions are for the banks," the finance minister said, conceding however that the deal will further increase Spain's mushrooming public debt. Nevertheless, the eurozone ministers said they were confident Spain would honour commitments to cut the deficit and restructure the economy. "Progress in these areas will be closely and regularly reviewed," they said in the statement. Spain, which will become the fourth eurozone state to receive financial help since the sovereign debt crisis erupted two years ago, finally sought aid as the cost of buttressing the banks spiralled in past weeks. Recently nationalised Bankia, which has the largest exposure to the real estate sector, needs 19 billion to repair its books. Under today's deal, up to 100 billion would be provided by the European rescue mechanisms to recapitalise Spanish banks, the eurozone ministers said, providing an "effective backstop" for all possible requirements. "So we have a new concept. A 'lite' bailout with no material conditions on the sovereign and instead merely the banks that apply," Lloyds Banking Group economist Charles Diebel said in a report. "This is the latest in the long list of euro measures to stem the crisis. Will it be enough? That's questionable as it is still prevention rather than cure and again only keeps the banking sector alive rather than really supporting growth." The scale of the aid depends on an external audit being carried out for Madrid by consultants Roland Berger and Oliver Wyman. The audit is due by June 21 but de Guindos said it would ready within a few days. De Guindos stressed that the 100 billion included a big safety margin. "This announcement is good news for the Spanish economy and for the future of the eurozone," he said. International Monetary Fund bank stress tests, unveiled Friday three days ahead of schedule, determined that Spanish banks need about 40 billion in new capital. But an IMF official noted that the banks would probably need more than that to build a "credible firewall". The assistance is to be channelled through Spain's state-backed bank Fund for Orderly Bank Restructuring, eurozone policymakers said. Policymakers hope the rescue will satisfy financial markets and put Spain in a safe harbour ahead of the Greek elections on June 17, which risk leading to a destabilising exit from the eurozone. German Finance Minister Wolfgang Schaeuble hailed the deal for Spain, saying he and his colleagues welcomed Madrid's "determination" to recapitalise the banks with "rescue funds". His French counterpart Pierre Moscovici called it a good agreement which gives "a very strong signal of solidarity" among Spain's eurozone partners. In Washington, IMF managing director Christine Lagarde said she welcomed the Eurogroup decision to provide a "credible backstop" to the Spanish banking system. US Treasury Secretary Timothy Geithner also welcomed the moves, saying: "These are important for the health of Spain's economy and as concrete steps on the path to financial union, which is vital to the resilience of the euro area." Read more: http://www.news.com.au/business/bre...ne/story-e6frfkur-1226390286532#ixzz1xM3ESSks
More money into the pit. In a couple of months or less they'll be back for another $100 billion or so. As for fiscal union, Germany can't do this without a referendum and change to its constitution.
Actually I just saw this over at Zero Hedge. Looks like THE BANKS needed a hundred billion, not Spain http://www.zerohedge.com/news/spain-greece-after-all-here-are-main-outstanding-items Admitted Sovereign Debt $732 billion Admitted Regional Debt $183 billion Admitted Bank Guaranteed Debt $103 billion Admitted Other Sovereign Gtd. Debt $ 72 billion Total National Debt $1.090 trillion
Ah the Germans do have a sense of humour apparently.. And I don't blame them.. "All you have to do is to do the exact opposite of what you want to do. Let us run this mess and manage the revenue for you. We'll sort it out, and we'll also prove that we know how to manage your finances better than you do, which is what we've been saying all along." Read more: http://www.digitaljournal.com/article/326386#ixzz1xNbzldC8 http://www.digitaljournal.com/article/326386
http://www.bbc.co.uk/news/world-europe-18385634 Spain's Rajoy hails bank rescue as 'victory for euro' The European Union's economic affairs commissioner, Olli Rehn, said the deal should help calm investors' nerves: "This is a very clear signal to the markets, to the public, that the euro area is ready to take decisive action in order to calm down market turbulence and contain contagion." :lol: Lloyds Banking Group economist Charles Diebel said in a report that the move was "bailout lite" and questioned whether the money would stop the rot: "Will it be enough? That's questionable as it is still prevention rather than cure and again only keeps the banking sector alive rather than really supporting growth." Wow a banker telling it like it is, wow!
Will be interesting to see just how the markets do react - I hope the NY Globex session is a sign of things to come this week, although I've learnt not to expect much and then you can't be dissapointed: Au - Up .68 % this mornings Globex session Ag - Up 1.72 % this mornings Globex session Pt - Up .98 % this mornings Globex session On a somewhat off-topic note; Whenever I see Olli Rehn's name it makes me think of O-Ren Ishii from Kill Bill - I can imagine a few might find O-Ren's management style an effective way of dealing with recalcitrant heads of state (skip to 2 minutes to see the solution) [youtube]http://www.youtube.com/watch?v=w2tD3uDqEUg[/youtube]
Spain committed 92BN Euro(s) to the ESM, now it is asking for 100BN Euro(s) to bailout...sorry...assist its own banks. So how can it possibly commit that 92BN Euro(s) to the ESM?
It commits 92b from raised funds (selling bonds, borrowing, investment, selling grandma, etc). Commits, another promise to give in the future, or debt.
