Is the EC pushing Spain towards a bailout?

[PaddyJoe]

Property prices are still falling in Spain and their banking system is sitting on huge losses. Spanish newspapers reported yesterday that the EC is applying pressure on the government to accept aid from the EFSF
El País:

The Commission feels that Spain should not consider having to tap the fund as a stigma. “There is one possibility, and that is to continue to drag one’s feet, stretching out the process, and that the banks continue not to lend, therefore, stymieing the recovery,” a source in Brussels said. “And there is an indirect way, which is to tap the rescue fund. There are no easy solutions to the crisis.”
The government has rejected the option of seeking a loan from the fund. “But the resources of the Deposit Guarantee Fund are running out, and if there is a sharp fall in house prices, there will be no other option but to inject public funds in the banks,” a market source said
However, the EC spokesman Amadeu Altafaj this morning has said that the reports are 'without foundation'
Sound familiar?
http://elpais.com/elpais/2012/03/27/inenglish/1332868805_021318.html

[DCon]

Are there publicly owned assets in Spain that individuals and corporations might like to acquire on the cheap?

The answer is the same as the answer to the thread title.

[C. Flower]

Property prices are still falling in Spain and their banking system is sitting on huge losses. Spanish newspapers reported yesterday that the EC is applying pressure on the government to accept aid from the EFSF
El País:

However, the EC spokesman Amadeu Altafaj this morning has said that the reports are 'without foundation'
Sound familiar?
http://elpais.com/elpais/2012/03/27/inenglish/1332868805_021318.html

Spain is too big to bail, surely? Greece is only 3% of EU GDP - and Spain ?

[morticia]

From what I've heard from individuals on the ground, the Spanish government is having issues paying its bills.

Tbh, if that's the case, they should take the bailout. There's nothing that destroys faith in the civic authorities quicker than rapid service and entitlement breakdown (see Greek thread).

It may be the lesser of two evils.

[morticia]

http://www.guardian.co.uk/world/2012/mar/25/eurozone-spain-cuts-mariano-rajoy

The Grauniad commentariat doesn't enjoy unlimited confidence in Spain (not to put too fine a point on it). Described as the single biggest threat to the Eurozone at the 'mo.

Pass the Valium sandwiches and strap yerselves in lads, we're in for another bumpy ride

[Apjp]

From what I've heard from individuals on the ground, the Spanish government is having issues paying its bills.

Tbh, if that's the case, they should take the bailout. There's nothing that destroys faith in the civic authorities quicker than rapid service and entitlement breakdown (see Greek thread).

It may be the lesser of two evils.

Take the soup in other words and don't steal back yer corn. Croppies lay down.

[PaddyJoe]

General strike tomorrow against cutbacks and changes which weaken workers' rights. #29N
TeleMadrid, well known for it pro PP, right wing line has closed from midnight with a testcard saying:

The general strike, called by the unions opposed to the labour reforms of he Nation's Government, is preventing transmissions by Telemadrid
http://twitpic.com/92luqn

[PaddyJoe]

Huge protests all over Spain today. Apparently electricity consumption was down 15% all over the country. Curious statistic in its own right.:)
Austerity budget cutting back 40 billion tomorrow. Unions are promising another general strike for the 1st May unless there are concessions on planned reversals of labour laws
http://elpais.com/elpais/inenglish.html

[PaddyJoe]

I see that Spanish bloggers are incensed about their Finance Minister Luis De Guindos giving an interview to the German press about health and education cutbacks before announcing the measures to the Spanish parliament.
Poor dears. They'll get used to that sort of stuff:rolleyes:
http://www.radiocable.com/guindos-periodico-aleman-frankfurter-allgemeine666.html

[barrym]

Bailout? aren't they already there? Like us they are getting the bottle feed of 1% walking around money.

This is 'the market' - handy to have a bit of a frisson before a few days hols, makes for plenty of comment over the w/e to soften up things for Tuesday.

The real measure here is the rate for the € v the $ and even the £; both on the slide. That is the only real measure, that is the price of money being bought and sold to pay wages etc., not proposals on speculators screens.

(Once again) the € is under pressure because some of the bigger members (Greece never counted, as was said, too small in the overall scheme of things) haven't yet sorted their economic policies. Even Italy is being considered as on the mend because they have a bureaucrat in charge, not a pol.... FFS, Ireland is now considered as ok, we have swallowed the medicine and we'll roll over on the fiscal fiction vote.

[PaddyJoe]

Difficult to see how some kind of 'bailout' deal can now be avoided. Spanish bond yields hit 5.99% this afternoon and confidence is continuing to ebb in spite of the government announcing a hasty new series of cuts to education and health worth 10 billion euros.
The problem with these cuts is that the autonomous regions control a lot of the spending targeted and will be very reluctant to cut budgets any further.
Just as in Ireland the black hole in the banking sector keeps expanding as property prices continue to fall.
Fiance minister Luis de Guindos said today that Spain does "not need a bailout at this time"
'At this time' could mean a matter of weeks at this stage.

[Sam Lord]

Fiance minister Luis de Guindos said today that Spain does "not need a bailout at this time"


The same refrain was heard in Ireland if my memory serves me correctly.

[PaddyJoe]

The same refrain was heard in Ireland if my memory serves me correctly.
Interesting that this new 10 billion in cuts came to light first in the German press on Sunday and was only then confirmed by the Spanish government;)
The Spanish press are complaining about the lack of information on the cuts and are reporting that head of government Rajoy is playing hide and seek with them today to avoid questions.

[C. Flower]

The Franco-German idea of putting Greece into the wringer "pour encourager les autres" was never going to work.

We should know by now that Europe is insolvent, not illiquid.

[PaddyJoe]

The hardline PP leader in Madrid, Esperanza Aguirre, made a speech today calling for the Central Government to take back control of health and education spending from the regions.
If they try that there will be blood on the streets, quite literally:(

[ang]

Meanwhile.....


Spain PM Rajoy: govt to limit cash transactions to €1,500

[C. Flower]

Meanwhile.....

Pity that, unlike Ireland, they have a land border, although you would think the Pyrenees would prevent any really heavy suitcases being hauled out.

[DCon]

yikes


Spain banks borrowed 316.3 bln euros from ECB in March – Bank of Spain

Big jump from 169.8 bln in February

http://www.forexlive.com/blog/2012/04/13/spain-banks-borrowed-316-3-bln-euros-from-ecb-in-march/

[fluffybiscuits]

http://businessetc.thejournal.ie/its-not-possible-to-rescue-spain-says-spanish-pm-on-bailout-talk-416033-Apr2012/

Rajoy says not possible to rescue Spain. Are they going it alone?

[PaddyJoe]

Spanish 10 year bond yield has hit 6% this afternoon.

[PaddyJoe]

The Spanish media is unhappy to find out that King Juan Carlos broke his leg hunting elephants in Botswana during the week and nobody told them until today
Indignados, they are. In fact positively fed up:D

[PaddyJoe]

Hunting trip may have cost up to 45k. Not a good look in austere times

http://i43.tinypic.com/2ujk2mq.jpg

[morticia]

Pity that, unlike Ireland, they have a land border, although you would think the Pyrenees would prevent any really heavy suitcases being hauled out.

they have a very large fishing fleet and an extensive coastline.....

[C. Flower]

Megan Greene provides some figures and says it is inevitable that Spain will need a bailout.

http://economistmeg.com/2012/04/15/why-spain-wont-regain-market-confidence/

[Sam Lord]

Hunting trip may have cost up to 45k. Not a good look in austere times

He's killing elephants? Why? That is truly disgusting.

[Sam Lord]

Spain's 10 year bond at 6.1% today.

[PaddyJoe]

He's killing elephants? Why? That is truly disgusting.
There's a lot of people in Spain who are very annoyed. He's also the President of the Spanish World Wildlife Fund so that's going down rather badly as well.

[C. Flower]

There's a lot of people in Spain who are very annoyed. He's also the President of the Spanish World Wildlife Fund so that's going down rather badly as well.

Wasn't the Duke of Edinburgh the President of the WWLF ..... ? :(

Killing large mammals seems de rigueur for these posts.

[PaddyJoe]

Hunting trip may have cost up to 45k. Not a good look in austere times

Oh dear(or 'joder'):)
The press are dropping heavy hints about the nature of the relationship between the king and the German divorcee Corinna zu Sayn-Wittgenstein who organized the hunting trip:)

[DCon]

Spain may be going down a NAMA route.


Spain is considering the idea of creating a "bad bank" to take over non-performing real-estate loans from Spanish banks to help clean up the sector, but so far there are no plans for such an institution, European officials said on Saturday.

"There is no plan or decision, but some consideration, as far as I know. It could, possibly, be a good idea," one senior European Union official said.


http://www.reuters.com/article/2012/04/21/us-spain-badbank-idUSBRE83K0EC20120421

[PaddyJoe]

Spain cut two notches to BBB+ from A by S&P. Outlook negative.

[DCon]

Spanish unemployment tops 24%

http://www.bloomberg.com/news/2012-04-27/spain-s-unemployment-rate-rises-to-highest-in-18-years.html

[C. Flower]

Spanish unemployment tops 24%

http://www.bloomberg.com/news/2012-04-27/spain-s-unemployment-rate-rises-to-highest-in-18-years.html


Nasty looking graph.


http://twitpic.com/9e9ijb
http://d3j5vwomefv46c.cloudfront.net/photos/full/568154135.jpg?key=525569&Expires=1335520106&Key-Pair-Id=APKAIYVGSUJFNRFZBBTA&Signature=AyoRnCkIY7AZa6%7EfNf8oqNOC-ENZmNPYL%7EKgXPPe2xuI6O6i98unDP4mmHnZpMSp%7Ebdf1lQ IQWx0aA33mFAW1h6J8rbD6V0A5%7EkNTihJSWN0021AY4lsO9T 9BlMiSewL3Sqq6gsJ8bntghUckwC8y69qb4cXufiy2P0gtMD9y cU_


http://d3j5vwomefv46c.cloudfront.net/photos/full/568154135.jpg?key=525569&Expires=1335520106&Key-Pair-Id=APKAIYVGSUJFNRFZBBTA&Signature=AyoRnCkIY7AZa6%7EfNf8oqNOC-ENZmNPYL%7EKgXPPe2xuI6O6i98unDP4mmHnZpMSp%7Ebdf1lQ IQWx0aA33mFAW1h6J8rbD6V0A5%7EkNTihJSWN0021AY4lsO9T 9BlMiSewL3Sqq6gsJ8bntghUckwC8y69qb4cXufiy2P0gtMD9y cU_

[C. Flower]

Spain cut two notches to BBB+ from A by S&P. Outlook negative.

Mayhem.

Has pushed Italy's bond prices up too.

http://www.reuters.com/article/2012/04/27/us-spain-economy-idUSBRE83Q0BQ20120427

There is a profitable hunter-killer operation going on. The weakest economy at the back of the Euroherd will be brought down one at a time until there is no-one left.

[PaddyJoe]

Spain is still looking at a NAMA style bad bank, it appears. You'd think that Ireland would serve as a warning....
They must have a few Peter Bacons knocking around over there as well.
Pedro Jamón, quizás..

Ministers had decided they had no need of an Irish-style bad bank. But economists say the crisis is so dire that weak banks will need further recapitalisation of about €100bn.

Government officials insist that the scheme should not be called a bad bank, because it will not be a bank and participating lenders will be able to park assets in it only if they have set aside sufficient bad loan provisions, independently valued.
That raises the question of how it will help banks trying to raise provisions for other loans and strengthen their capital. One official said it would relieve banks of the burden of trying to sell homes and let them focus on their core business of providing credit to the private sector. Bank executives who favour the idea say it is better than a rescue for the banking system financed by the state or the EU.
The scheme is being developed by Luis de Guindos, economy minister, and is in line with a recommendation by the International Monetary Fund.
http://www.ft.com/intl/cms/s/0/7906c8ec-921e-11e1-867e-00144feab49a.html#axzz1tTcC6obW

[ang]

Spain is now officially in recession.

S&P downgrades 11 Spanish banks. & Negative Watch 16

[C. Flower]

Protests of tens of thousands in Barcelona last month and right across the country at the weekend, with banners saying "people of Europe, rise up!" as in Greece.

http://www.rte.ie/news/2012/0429/tens-of-thousands-protest-spanish-budget-cuts.html

http://english.cri.cn/6966/2012/04/29/3141s696389.htm

Spain Barcelona General Strike 29/3/2012 - YouTube

[DCon]

Emigration the only solution for unemployed Spanish youth?

http://www.ft.com/intl/cms/s/0/f2018cf0-9467-11e1-8e90-00144feab49a.html#axzz1u1XJRUUR

[C. Flower]

Emigration the only solution for unemployed Spanish youth?

http://www.ft.com/intl/cms/s/0/f2018cf0-9467-11e1-8e90-00144feab49a.html#axzz1u1XJRUUR

Yes, they should come to Ireland ....

[DCon]

Seems Spain might be about to start their bank bailout


http://www.zerohedge.com/news/spanish-bank-bailout-begins

[C. Flower]

Seems Spain might be about to start their bank bailout

http://www.zerohedge.com/news/spanish-bank-bailout-begins

One big bank needing a bailout of about €10 billion.

[DCon]

Rajoy reluctant to use the EFSF say Spiegel


Spanish banks are particularly unsteady. They are sitting on roughly €1 trillion ($1.3 trillion) in shaky loans related to the ailing real estate sector -- and urgently need fresh capital as a risk buffer. The estimates for the cash shortfall range from €50 billion to €200 billion.

Since such sums of money would overburden both the banks and the government budget, experts believe that the Spanish government should urgently seek help from the EFSF. But Spanish Prime Minister Mariano Rajoy is resisting this move, not just because the euro partners would basically have a say in governing the country, but also because his entire nation would then be branded as high risk -- and would probably find itself cut off from the international financial markets for a long time.

http://www.spiegel.de/international/europe/europe-needs-to-reform-its-banking-sector-a-831712.html

[PaddyJoe]

Looking very likely that Bankia is going to at be at least partially nationalised before the end of the week. It's a bankiing conglomerate cobbled together last year by merging six of the 'cajas' or savings banks. With 10 million customers it's the third largest bank in Spain.
More black holes opening up in the Spanish banking sector.

[DCon]

Bailout in 5, 4, 3..


Spanish Govt to inject public funds into banks that fail to meet provisioning requirements

http://www.forexlive.com/blog/2012/05/11/spanish-govt-to-inject-public-funds-into-banks-that-fail-to-meet-provisioning-requirements/

[morticia]

Looking very likely that Bankia is going to at be at least partially nationalised before the end of the week. It's a bankiing conglomerate cobbled together last year by merging six of the 'cajas' or savings banks. With 10 million customers it's the third largest bank in Spain.
More black holes opening up in the Spanish banking sector.

Have we had the entertaining bailout denials from mutiple ministers while Rajoy is summoned to Sprout HQ repeatedly?? If not, we're probably 2 weeks away from bailout

So that's OK then ;-)

[PaddyJoe]

This is very dangerous territory for a PP Spanish government:





The Spanish government, which is due to approve the spending plans of the 17 autonomous communities on Thursday, said it was considering forcing further cuts in Asturias, or seizing control of the northern region’s budget, as the interim local government had been unable to agree on a spending programme.
http://www.ft.com/intl/cms/s/0/1e12624e-9d08-11e1-9327-00144feabdc0.html#axzz1unUiCrPZ

[PaddyJoe]

Bankia shares collapsing today. Down 28% now on a story from El Mundo yesterday that 1.3 billion in deposits has been withdrawn in the last few days.
There's also a rumor that Moodys is going to downgrade Spain this evening.

[PaddyJoe]

As expected Moodys have downgraded the Spanish banks tonight:

NEW YORK | Thu May 17, 2012 6:01pm EDT
(Reuters) - Moody's Investor Service carried out a sweeping downgrade of 16 Spanish banks on Thursday, including Banco Santander, the euro zone's largest bank, citing a weak economy and the government's reduced ability to support troubled lenders.
http://www.reuters.com/article/2012/05/17/us-moodys-spain-banks-idUSBRE84G1GC20120517

[Hapax]

From the NYT:


The principal remaining force driving jobs and taxable revenue is tourism, as it was in the times of Francisco Franco. It is “uniquely dispiriting,” lamented the novelist Ernesto Pérez Zúñiga, that so little has changed. Spain’s economy once was consigned to depression by Franco’s autarchic policies; now it is subjugated by the tyranny of the markets.


Daily, hordes of Spaniards swarm the streets to protest mounting government cutbacks, while protesters with more programmatic leanings sound a refrain of reform: change the electoral law; make state finances more transparent; crack down on political corruption.

Their fixation on process is revealing. Citizens are losing confidence in the power of their votes; assemblies and rallies are hurriedly convened to stem the tide of further government cutbacks, but to scant effect. As one young protester told me, “We don’t have the luxury of advancing much of an agenda beyond beating back government cuts.”

Because Spain’s economic fate no longer seems to be in Spain’s own hands, the crucial intermediary space between what the state needs and what the people want — the ground on which politicians are normally held to account — has shrunk. Sometimes it seems that the closer Spain has moved to Europe, the more democracy eludes its grasp.

[DCon]

Spain and Bankia suffering from the Lenihan effect


Bank Of Spain Formally Nationalizes Bankia, Says Insolvent Bank Is "Solvent", Adds There Is No Cause For Concern, Zero Hedge, May 9
Spain is taking over Bankia by converting its 4.5 billion euros of preferred shares in the group’s parent company into ordinary shares, BusinessWeek, May 21
Spain said on Wednesday its rescue of problem lender Bankia would cost at least 9 billion euros ($11 billion), as the government tries to clean up a banking system that threatens to drag the country deeper into the euro zone crisis, Reuters, May 23
Bankia SA will have to ask the Spanish government for more than 15 billion euros as part of its effort to restore its financial health, state-owned news agency EFE reported Thursday, citing financial sources, Dow Jones, May 24


http://www.zerohedge.com/news/bankia-bailout-costs-grow-exponentially-stealth-bank-run-taking-place-and-what-happens-ronaldo

Have we now entered the Twilight Zone?


"The most expensive footballer in history may now be used to guarantee the solvency of a Spanish bank. “Ronaldo in the bailout fund,” headlines Süddeutsche Zeitung. The daily reports that the Bankia group of savings banks, which financed Real Madrid’s acquisition of the Portuguese player, is now seeking to borrow funds from the European Central Bank. In response to the ECB’s demand for guarantees, Bankia are putting up… Ronaldo and the Brazilian Kaka, who also plays for the Madrid football club. In 2009, Real borrowed 76.5 million euros to pay transfer fees of 100 millions euros to Manchester United, and 60 million to Milan AC."

http://www.presseurop.eu/en/content/news-brief/796481-ronaldo-s-new-position-bank-collateral

[Ephilant]

Shares in Bankia have been suspended ahead of an emergency meeting this afternoon.

The meeting is called to
reformulate its accounts for 2011 and submit a plan to shore up its finances.

Bankspeak for cooking the books??? Bankia is apparently looking for a 15€billion bailout, this is on top of the 4.5€ already received...

[DCon]

Shares in Bankia have been suspended ahead of an emergency meeting this afternoon.

The meeting is called to

Bankspeak for cooking the books??? Bankia is apparently looking for a 15€billion bailout, this is on top of the 4.5€ already received...

The 15 thousand million has increased to 19 thousand million

http://www.zerohedge.com/news/bankia-bailout-costs-rise-again-now-%E2%82%AC19-billion-%E2%82%AC4-billion-increase-overnight

[PaddyJoe]

Tomorrow's El Mundo says that the Spanish government is to put a further 30 billion into another three banks. That's apart from the 20 billion already going into Bankia.
Looking more like the Irish experience with every week that goes by.

[PaddyJoe]

Tweet from an El Mundo editor:

Pablo Rodriguez ‏@Suanzes
El Mundo's front page: "Spain will ask for help from European funds if spread does not fall in the next few weeks"

[DCon]

Tomorrow's El Mundo says that the Spanish government is to put a further 30 billion into another three banks. That's apart from the 20 billion already going into Bankia.
Looking more like the Irish experience with every week that goes by.

Will Spanish Ministers be claiming "Spain is not Ireland" in the coming week?

[PaddyJoe]

Will Spanish Ministers be claiming "Spain is not Ireland" in the coming week?

I'm pretty sure they tried that one already:)

[DCon]

Spain is giving bonds to Bankia, getting Shares in Bankia in return and Bankia will take their Spanish bonds to the ECB and get cash


Bankia could use the sovereign paper as collateral to get cash from the European Central Bank, forcing the ECB to get involved with restructuring Spain's banking sector, laid low by lending to property developers in a boom that ended in 2008.

Reports on Monday stated that Spain had approached the ECB with the plan, and that the latter had no objections.


The Bankia rescue will affect Spain's public debt to gross domestic product ratio and the deficit at a time when the country has implemented growth-stifling austerity measures aimed at bringing state debt down to Europe-agreed levels.

http://www.telegraph.co.uk/finance/financialcrisis/9294146/Spain-could-recapitalise-Bankia-with-government-bonds.html

[concernedparent]

I'm pretty sure they tried that one already:)

They same way as Ireland is not Greece

[DCon]

I always thought the Spanish were dreamers


More Rajoy: When Bankia is recapitalised, bank will be sold and state investment recovered

http://www.forexlive.com/blog/2012/05/28/more-rajoy-when-bankia-is-recapitalised-bank-will-be-sold-and-state-investment-recovered/

[Sam Lord]

The spanish ten year bond yield hit 6.5% this morning. They won't be able to hold the line for long at that.

[DCon]

If Spain is broke, they will still be paying the below? Correct?




The capital payments are to be made in the ratio of ECB capital weights, meaning
that the bulk will be made up by Germany (€21.7bn) and France (€16.3bn), but notably Italy (€14.3bn) and Spain (€9.5bn) will need to contribute as well


http://www.scribd.com/doc/88466810/ESM-and-ESFS-by-Nomura

[C. Flower]

If Spain is broke, they will still be paying the below? Correct.

http://www.scribd.com/doc/88466810/ESM-and-ESFS-by-Nomura

This bail out cash doesn't actually exist. Thinner and thinner collateral is being used to leverage supposed bailout money and repayments.

The implications are hyper inflation, or collapse, if not both.

There is, underneath it all, an unbreakable tie between cash and real value. It can be stretched long way, but not severed completely. It reasserts itself, and bubbles burst - even bailout bubbles.

[DCon]

Spain is giving bonds to Bankia, getting Shares in Bankia in return and Bankia will take their Spanish bonds to the ECB and get cash

Good old creative accounting


Bankia Parent Revises 2011 "Profit" Of €41 Million to €3.3 Billion Loss


But that's not all. According to Spain's Expansion, the total loss could be far worse, more than double the just reported, to a total of €7 billion

http://www.zerohedge.com/news/bankia-parent-revises-2011-profit-%E2%82%AC41-million-%E2%82%AC33-billion-loss


http://2.bp.blogspot.com/-DazsX6lWOjk/TyXGCOn2q3I/AAAAAAAAA8Y/qr7XIxDF-KE/s1600/4986448_tml.jpg

[C. Flower]

Good old creative accountin

http://www.zerohedge.com/news/bankia-parent-revises-2011-profit-%E2%82%AC41-million-%E2%82%AC33-billion-loss


http://2.bp.blogspot.com/-DazsX6lWOjk/TyXGCOn2q3I/AAAAAAAAA8Y/qr7XIxDF-KE/s1600/4986448_tml.jpg

Anyone who has taken a good look around Spain will know that this is potentially much bigger than the Irish bank collapse. The Spanish economy is also a much bigger economy, but it is in a poor state, with very high unemployment.

[PaddyJoe]

Serious stand off between Spain and the ECB. Spain won't get pushed around the way Ireland, Greece and Portugal did:
From the FT tonight:

A Spanish plan to recapitalise Bankia (http://markets.ft.com/tearsheets/performance.asp?s=es:BKIA), the troubled lender, by indirectly tapping the European Central Bank for cash, was bluntly rejected as unacceptable by the ECB, European officials said.


Senior government officials in Madrid argue that bailouts in Portugal, Greece and Ireland have been catastrophic and Spain will not compromise on its refusal to accept a similar form of intervention.
They said the country had implemented reforms requested by Brussels and must now be granted relief by the ECB, or the future of the single currency will be threatened. The government would like to see the ECB restart its government bond-buying programme and wants the nascent European Stability Mechanism to be retooled as a bank bailout fund.
“This is like a game of poker now,” one government adviser said, “and I don’t think Spain is bluffing”.

http://www.ft.com/intl/cms/s/0/7730ca10-a9b4-11e1-9772-00144feabdc0.html#axzz1wI15Wp00

[PaddyJoe]

Wednesday's EL Pais says the the EC is considering giving Spain an extra year to reduce its deficit to 3% of GDP. However, Spain will have to bring forward measures on the retirement age, increases in VAT and cuts in unemployment payments.
Meanwhile the Governor of the Central Bank of Spain is bringing forward his retirement to next month.
http://ep00.epimg.net/descargables/2012/05/30/0aedf4eda38fe7e53985de3708ab17c0.pdf

[DCon]

Spain have said they will be giving Bankia cash now. They will sell Treasuries to get the cash.

[C. Flower]

Wednesday's EL Pais says the the EC is considering giving Spain an extra year to reduce its deficit to 3% of GDP. However, Spain will have to bring forward measures on the retirement age, increases in VAT and cuts in unemployment payments.
Meanwhile the Governor of the Central Bank of Spain is bringing forward his retirement to next month.
http://ep00.epimg.net/descargables/2012/05/30/0aedf4eda38fe7e53985de3708ab17c0.pdf

I note that Spain has strongly expressed the view that "the Programme" has been disastrous for Greece, Italy and Portugal, and that they have no intention whatsover of going the same route themselves.

The "too big to fail" countries, even in failure, will not be so easily pushed around as the smaller states.

And also, how much more can Spain take, with youth unemployment over 50% ?

Deep though the reluctance is for a generation coming out of a long party / credit boom to face it, we are in for very serious and historic decisions that we all have to make about what kind of society we are going to have and none of the options involve going back to party mode. A huge change for the worse or better is inevitable.

Currently, the class of political, social and economic "elite" are making the decisions, without our real input, and they are understandably trying to protect and strengthen their own privilege while trying to extract wealth from the rest of the population. There is a head to head conflict developing along these lines.

[C. Flower]

Reuters today - ECB direct funding to banks discussed, but only after a banking union.

http://www.reuters.com/article/2012/05/30/us-eu-economy-eurozone-idUSBRE84T0KM20120530

One step nearer to an open banker's regime in Europe from the top down.

Is it time for populations to get local currency alternatives working ?

[Sam Lord]

Spanish ten year bond is at 6.7% today. Italy has breached the 6 mark.

[Sam Lord]

Namawinelake thinks Spain will need 700 billion. That should make a big hole in the EMS. Ireland may end up contributing more to this fund than it is able to borrow from it.

http://namawinelake.wordpress.com/

[PaddyJoe]

Dramatic front page of Thursday's El Pais

Even Brussels is unable to calm the storm

Markets up the pressure after the ECB rejects the Bankia rescue plan

Barroso suggests that the ESM could directly recapitalise the banks

Rehn confirms that Spain will have an extra year to achieve deficit targets

The government, under huge stress, seeks support from Berlin and Washington

The Socialists(PSOE) ask Congress for an inquiry into the management of Bankia
http://ep00.epimg.net/descargables/2012/05/31/965321db32d35ecd28661f87a8782cbe.pdf

[PaddyJoe]

That front page story also says that Finance Minister, Luis de Guindos, flew to Berlin to meet Schauble Wednesday afternoon while the deputy PM, Soraya Saenz, flew to Washington to meet Christine Lagarde and Tim Geithner.

[riposte]

The social conditions in Spain could end up worse than Greece ..... the Spanish must have been asleep when we bailed-out our banks.

[C. Flower]

Tonight's RTE news showed miners protesting - two thirds of them are threatened with losing their jobs.

14 million payout to Bankia's resigning CEO can't have have helped their mood.

The powers that be will be worrying about the Greek and Spanish working classes making common cause.

[PaddyJoe]

Tonight's RTE news showed miners protesting - two thirds of them are threatened with losing their jobs.

14 million payout to Bankia's resigning CEO can't have have helped their mood.

The powers that be will be worrying about the Greek and Spanish working classes making common cause.
Something else that's not helping their mood is that the cajas that were merged to form Bankia are stuffed with Partido Popular relatives and cronies up to and including the Executive Chairman Rodrigo Rato who was Finance Minister in the Jose Maria Aznar government 2004 to 2007.

[Ephilant]

There are persistant rumours here today that a Catalan delegation arrived in Athens for talks with SYRIZA to explore "Future Political, Economic and Cultural Cooperation".
You can be sure these guys are not from the Partido Popular...

[DCon]

Spain reminding Germany of recent economic history


Spanish FinMin: Germany must be aware of imbalances created by euro

Should do its part in correcting these imbalances



http://www.forexlive.com/blog/2012/05/31/spanish-finmin-germany-must-be-aware-of-imbalances-created-by-euro/

[MPB]

Spain reminding Germany of recent economic history



http://www.forexlive.com/blog/2012/05/31/spanish-finmin-germany-must-be-aware-of-imbalances-created-by-euro/

I suppose the next row in Europe will be called a civil war as distinct from a World War.

The Treaty of Rome was not a total waste of time afterall.

[Sam Lord]

I suppose the next row in Europe will be called a civil war as distinct from a World War.

The Treaty of Rome was not a total waste of time afterall.

With any luck it will be a big class war.

Like in the song ..

"'...Tis the final conflict, let each stand in his place. The Internationale shall be the human race."

:)

[C. Flower]

There are persistant rumours here today that a Catalan delegation arrived in Athens for talks with SYRIZA to explore "Future Political, Economic and Cultural Cooperation".
You can be sure these guys are not from the Partido Popular...

Did you see the miners out protesting in Madrid today ? These are people to have on one's side.

[Ephilant]

Did you see the miners out protesting in Madrid today ? These are people to have on one's side.

Indeed, flashbacks of Maggie Tatcher...

I do think we are withnessing a shift within the EU, and not one the mandarins in Brussels will like. I don't think they had ever, not even their wildest dreams, expected a fight back. Especially not from the "Lazy" Greeks. This ripple could grow into a Tsunami before they know what hit them.

[MPB]

With any luck it will be a big class war.

Like in the song ..

"'...Tis the final conflict, let each stand in his place. The Internationale shall be the human race."

:)

Maybe, hopefully, with any luck.:)

I can,t see any citizen in Europe willing to go to war for their current Govts.

Me thinks Europe is far more united than it ever was, just not in the way it was meant to be.

[PaddyJoe]

Another fairly apocalyptic front page from El Pais on Friday 1st June. Headline is from Finance Minister Luis de Guindos who says that the (future of) the euro is all to play for in Italy and Spain in the next few weeks.
Who said anything about Italy, Mr de Guindos?;)
Meanwhile there's a panic stricken piece at the bottom of the page about the potential horror of leaving the euro and Spain going back to the fifties..:)
http://ep00.epimg.net/descargables/2012/06/01/f05cf2f064d5c54e370427b0bfb31315.pdf

[MPB]

Spanish Fin Min in the US meeting Geithner and IMF today.

I seem to remember a similar meeting with our Fin Min just before our so called bailout.

I wonder if this is where the euros Banker gets to threaten the Spanish Fin Min about burning Bank bondholders?

I also wonder whether the peoples of both the US and Europe have discovered that the FED is backstopping the ECB at the moment.

[morticia]

Whoa, any more data on how much wonga is involved? How come the ECB needs backstopping ?

[morticia]

Perhaps now is not the time to remind everyone that when we started the bank bailouts here, we had 25% govt debt, less than 10% unemployment, and no real knowledge of where we were headed. Spain right now is not so fortunate

[PaddyJoe]

Sunday's El Pais says that the EU is pushing Spain into a financial rescue and adds that the German government is pressurising the Spanish government to accept help.
http://srv00.epimg.net/pdf/elpais/1aPagina/2012/06/ep-20120603.pdf

[PaddyJoe]

It seems El Pais are taking that story from Der Spiegel's Sunday lead.
Apparently Schäuble pushed De Guindos to accept a bailout when he flew to Berlin on Wednesday afternoon.
The German government wants Spain to tap the EFSF and they estimate that the Spanish banks need between 50 and 90 billion.
Berlin is categorically ruling out direct aid to the banking sector.
Rescue funds will only be paid out to governments.
As usual, google translate is your friend.
http://economia.elpais.com/economia/2012/06/02/actualidad/1338662147_940152.html

[Sidewinder]

Berlin is categorically ruling out direct aid to the banking sector.
Rescue funds will only be paid out to governments.

You have to wonder just why the Eurotrons are so fanatically obsessed with socializing banking losses and forcing them onto the nation states.

Unless of course the whole point of this manoeuvre is to quite deliberately bankrupt and then dismantle the nation states entirely. The "European Project" must proceed, by any means necessary.

[Ephilant]

Unless of course the whole point of this manoeuvre is to quite deliberately bankrupt and then dismantle the nation states entirely. The "European Project" must proceed, by any means necessary.

That is precisely the whole point of the exercise. Putting the burden on the nation states bankrupts the nation states, putting the burden where it belongs bankrupts the banks. How could you even suggest we think of bankrupting the holiest of holy cows...

[DCon]

The German's are anxious for Spain to transfer debt to the sovereign

We've seen this before


German Chancellor Angela Merkel and Finance Minister Wolfgang Schaeuble are urging Spain’s government to take an international bailout as it struggles to shore up the country’s banks, Der Spiegel magazine reported, without saying where it got the information.

Spain alone cannot solve its banking troubles and Merkel and Schaeuble want Spain to tap Europe’s temporary bailout fund, the European Financial Stability Facility, for aid for banks, Spiegel said.

Schaeuble pressed Spanish Economy Minister Luis de Guindos on a bailout during the latter’s visit to Berlin last week, and de Guindos rebuffed him, Spiegel said.

http://www.bloomberg.com/news/2012-06-02/merkel-presses-spain-to-accept-bailout-spiegel-reports.html

[PaddyJoe]

Bankia to burn bondholders? It looks like interest payments of 61.3 million to subordinated bondholders and shareholders are being put on hold.
http://www.expansion.com/2012/06/03/empresas/banca/1338734354.html

[PaddyJoe]

Monday's El Pais says that the government is involved in intense negotiations with European partners in order to find an acceptable formula to recap it's banks.
The key is Germany and Rajoy's government believes that Berlin is shifting it's ground little by little.
"There are important people who are beginning to get frightened and that is good. Nobody believes that Europe wants to commit suicide', according to a government source.
http://srv00.epimg.net/pdf/elpais/1aPagina/2012/06/ep-20120604.pdf

[DCon]

The German's are anxious for Spain to transfer debt to the sovereign


http://www.bloomberg.com/news/2012-06-02/merkel-presses-spain-to-accept-bailout-spiegel-reports.html

Not the first time!


According to El Mundo, Merkel twice recommended to former Spanish PM Zapatero than Spain receive a bailout.

Once in May 2010 after Greece received 110 bln euros in aid and again last year.

Recent reports have the German Chancellor once again trying to cajole the Spanish into taking aid.

http://www.forexlive.com/blog/2012/06/04/merkel-proposed-spain-bailout-twice-to-zapatero-mundo-says/

[Dr. FIVE]

Looks like there has been another er, strategic withdrawal from the markets

[riposte]

It was Nein! Nein! Nein! again today.

[Ephilant]

http://oi45.tinypic.com/91drfq.jpg

Nein!

[Greengoddess]

Monday's El Pais says that the government is involved in intense negotiations with European partners in order to find an acceptable formula to recap it's banks.
The key is Germany and Rajoy's government believes that Berlin is shifting it's ground little by little.
"There are important people who are beginning to get frightened and that is good. Nobody believes that Europe wants to commit suicide', according to a government source.
http://srv00.epimg.net/pdf/elpais/1aPagina/2012/06/ep-20120604.pdf

You might be interested in my encounter with the future German SPD Chancellor, Steinmeier


This was my question*to probably our last hope. It may have been not very diplomatic. I didnt feel diplomatic.....


*"I am an MEP from Ireland and I would like to welcome you here today.*
I have a question for you. As you undoubtedly know Ireland is part of a programme which we have stayed on track with. However our debts are not sustainable by any possible measure. *Ireland having just passed a referendum on the fiscal compact, as recently as yesterday Chancellor Merkel has once more declared that to have any restructuring of this debt would "send out the wrong signal" . The Irish people are long suffering now and becoming tired of all these signals. . If, or indeed when, you are in Government, what might be your position on this for Ireland and other countries?"

The answer was:
"How do we deal with accumulated debt? You have to take short term action with programmes. However, we have to find a way to deal with accumulated debt from the past. We need a redemption fund. We set up a fund in which we put all the debts together and paid it over a long period. We will take the debt of highly indebted states (over 60%) and put it into a redemption fund. We can spread the paying off debt over long time and change interest rate. The rest of the debt can then be paid off in the normal way.
He then said something about making it palatable to Germans.
This is not completely verbatim



--
connect with me on LinkedIn



--
connect with me on LinkedIn

[ang]

You might be interested in my encounter with the future German SPD Chancellor, Steinmeier


This was my question*to probably our last hope. It may have been not very diplomatic. I didnt feel diplomatic.....


*"I am an MEP from Ireland and I would like to welcome you here today.*
I have a question for you. As you undoubtedly know Ireland is part of a programme which we have stayed on track with. However our debts are not sustainable by any possible measure. *Ireland having just passed a referendum on the fiscal compact, as recently as yesterday Chancellor Merkel has once more declared that to have any restructuring of this debt would "send out the wrong signal" . The Irish people are long suffering now and becoming tired of all these signals. . If, or indeed when, you are in Government, what might be your position on this for Ireland and other countries?"

The answer was:
"How do we deal with accumulated debt? You have to take short term action with programmes. However, we have to find a way to deal with accumulated debt from the past. We need a redemption fund. We set up a fund in which we put all the debts together and paid it over a long period. We will take the debt of highly indebted states (over 60%) and put it into a redemption fund. We can spread the paying off debt over long time and change interest rate. The rest of the debt can then be paid off in the normal way.
He then said something about making it palatable to Germans.
This is not completely verbatim

Some reading on Redemption Fund here -


Now, let’s be clear: The redemption fund isn’t an instant fix for the eurozone — its administrative hurdles are on par with those for eurobonds. It would require modifying Article 125 of the Lisbon Treaty, which prohibits the EU or any member state from being liable for the “commitments” (a euphemism for debts) of any national, regional or local government. That requires signatures from all 27 EU heads of state and 27 parliamentary ratifications, even if it’s meant to apply only to the eurozone — and an Irish referendum isn’t out of the question. Nor are negotiations over U.K. or Swedish opt-outs, if the entire EU is meant to back the fund. So its existence is a long way off, if ever.

http://www.investorplace.com/2012/06/a-compromise-thats-better-than-eurobonds/

[Greengoddess]

Well I guess that's it then. What was slightly worrying was the sense that we do matter vey much. Of course this might only be because I am an MEP low in the pecking order .There was much more obesiance paid to the Spanish, Which doesn't matter. But if that situation I had was replicated at intergovernmental level.... Not something to dwell on.

[DCon]

Germany


"The parliamentary leadership of Germany’s ruling Christian Democrats – the majority party in Angela Merkel’s centre-right coalition government – has flatly rejected the use of eurozone rescue funds to recapitalise Spanish banks directly. Instead they called on the Spanish government on Tuesday to decide urgently whether it will seek money from the €440bn European Financial Stability Facility according to the fund’s normal rules, requiring agreement on a proper rescue programme negotiated with its European partners." In other words Germany has laid out the choice: bail out your banks with our help, and be downgraded, pushing Spanish sovereign yields into the 7%+ range, or do nothing


There was no sign in Berlin, however, of more urgent emergency measures being contemplated to prevent contagion in the current crisis spreading from Greece to Spain and beyond. Instead, the timescale for Germany’s proposed reforms would stretch until the spring of 2013.



Wolfgang Schäuble, German finance minister, held out the prospect on Tuesday of medium-term reforms, such as a “banking union” to provide deposit insurance for cross-border financial institutions, and even jointly guaranteed eurozone bonds – but only once a fully fledged “fiscal union” had been agreed for the whole eurozone.



In an interview with Handelsblatt, a business newspaper, he said that it was important to distinguish between immediate measures to resolve the present crisis and longer-term reforms to prevent its recurrence.



Both Greece and Spain, he said, must put their own economies in order.



http://www.zerohedge.com/news/germany-ruling-cdu-rejects-direct-spanish-bank-aid

[ang]

Well I guess that's it then. What was slightly worrying was the sense that we do matter vey much. Of course this might only be because I am an MEP low in the pecking order .There was much more obesiance paid to the Spanish, Which doesn't matter. But if that situation I had was replicated at intergovernmental level.... Not something to dwell on.

Probably not, but.......anyway the games continue - Spain May Get Precautionary Credit Line From EFSF, Welt Reports

http://www.bloomberg.com/news/2012-06-05/spain-may-get-precautionary-credit-line-from-efsf-welt-reports.html

[DCon]

Well I guess that's it then. What was slightly worrying was the sense that we do matter vey much. Of course this might only be because I am an MEP low in the pecking order .There was much more obesiance paid to the Spanish, Which doesn't matter. But if that situation I had was replicated at intergovernmental level.... Not something to dwell on.

I think the Irish government and reps would get short change due to their/our 100% obedience and compliance

[Greengoddess]

I think the Irish government and reps would get short change due to their/our 100% obedience and compliance

Yes and I could see it in myself. Nervousness about ' making trouble' and being grateful for small mercies. Classic signs of defensive capitulation. It is difficult to believe though, that a whole group could succumb to this. It occurs because the alternative is too scary or is made to seem that way to us . If the latter is the case it means that we have power that the ' other' does not want us to see. Why does this matter? Not when the civil servants are negotiating but, as they will tell you, they only operate under instructions, it is when Enda Kenny, Noonan and possibly Creighton are alone in the room with the Troika. Which is where Kennys unwillingness to debate becomes slightly worrying.

[Dr. FIVE]

That Aprés match skit of Lenihan hoping they would forget a few noughts looking more and more like a good idea tbh

[ang]

Spain this evening continuing to insist on debt mutualisation as Obama grows increasingly nervous over contagion and the Lehman spectre appears again -


US President Barack Obama is exasperated by Europe's failure to mobilise its own vast resources to stop contagion, a feeling shared in Beijing and Tokyo. "The crisis in Europe's economy has cast a shadow on our own," he said.
French foreign minister Laurent Fabius lashed out at the Americans, saying the US itself is to blame. "The crisis did not start in Europe. Lehman Brothers was not a European bank. We should not shift responsibility," he said.

http://www.telegraph.co.uk/finance/financialcrisis/9312326/Spain-makes-plea-for-EU-aid-for-troubled-banks.html

[MPB]

Yes and I could see it in myself. Nervousness about ' making trouble' and being grateful for small mercies. Classic signs of defensive capitulation. It is difficult to believe though, that a whole group could succumb to this. It occurs because the alternative is too scary or is made to seem that way to us . If the latter is the case it means that we have power that the ' other' does not want us to see. Why does this matter? Not when the civil servants are negotiating but, as they will tell you, they only operate under instructions, it is when Enda Kenny, Noonan and possibly Creighton are alone in the room with the Troika. Which is where Kennys unwillingness to debate becomes slightly worrying.

Says the person who voted Yes, out of belief in cowards.

[ang]

Hmmm maybe we will just put it off until a more convenient time -


eurozone spanish bank bailout "not possible today" - barnier

[ang]

You just couldn't make it up -


MOSCOVICI SAYS EUROPE NEEDS TO RESPECT SPAIN'S SOVEREIGNTY- BBG

[DCon]

All bailouts are not equal it seems


"A deal is in the works that would allow Spain to recapitalize its stricken banks with aid from its European partners but avoid the embarrassment of having to adopt new economic reforms imposed from the outside, German officials say. While Berlin remains firm in its rejection of Spain's calls for Europe's rescue funds to lend directly to its banks, the officials said that if Madrid put in a formal aid request, funds could flow without it submitting to the kind of strict reform program agreed for Greece, Portugal and Ireland.


http://www.zerohedge.com/news/another-spanish-bailout-plan-taking-shape


Now we will see what FG and Labour are made of

[Dr. FIVE]

Now we will see what FG and Labour are made of


:(

[PaddyJoe]

Bankia is to be investigated for fraud and false accounting according to El Pais.
Meanwhile the Austurian miners today blockaded motorways and clashed with riot police.
Another report confirms that Germany will accede to a 'soft bailout' for the Spanish banks which will not impose the conditionality that was forced on Greece, Portugal and Ireland.
http://srv00.epimg.net/pdf/elpais/1aPagina/2012/06/ep-20120607.pdf

[DCon]

From the FT




Unlike earlier bailouts for Greece, Portugal and Ireland, the proposed Spanish rescue would require few austerity measures beyond reforms already agreed with the EU and could even dispense with the close monitoring by international lenders that has proved contentious in Athens and Dublin, according to people familiar with the plans.



European officials said they were willing to consider a less intrusive monitoring system for Spain because Mariano Rajoy, prime minister, introduced a series of reforms and austerity measures earlier this year. “There may be better means of recapitalising banks than through a full programme … especially as the Spanish government is doing all the right things in structural terms,” said one senior official involved in the talks.




http://www.ft.com/cms/s/0/81e1c8ec-afe5-11e1-ad0b-00144feabdc0.html#ixzz1x3gvTFWE

[PaddyJoe]

From the FT








http://www.ft.com/cms/s/0/81e1c8ec-afe5-11e1-ad0b-00144feabdc0.html#ixzz1x3gvTFWE

I did say further up the thread that there was no way Spain would allow itself be pushed around like the PIGs;)

[C. Flower]

I did say further up the thread that there was no way Spain would allow itself be pushed around like the PIGs;)

You did - but the fat lady hasn't sung yet.

Interesting that while Lenihan wanted a bailout for the State not the banks, the Spanish government wants the reverse.

[morticia]

You did - but the fat lady hasn't sung yet.

Interesting that while Lenihan wanted a bailout for the State not the banks, the Spanish government wants the reverse.

From what I hear, I suspect Spain is suffering worse austerity than we are anyway. Unemployment is worse, while rumours abound wrt state employees not always getting paid, as in Greece. It may be that the EU powers that be have finally decided to concentrate resources where they are most needed. Ironically, it may well be a while before that is us. We have been paying our wage and welfare bills and the banks may well now be pretty stable in comparison to many heaving closets of horror on the continent. It would be mildly ironic if, when the dust settles, if it turns out that we were in fact, far from the worst affected. Is honesty the best policy when the banking sector collapses? We shall see.

[riposte]

Bankia is to be investigated for fraud and false accounting according to El Pais.
Meanwhile the Austurian miners today blockaded motorways and clashed with riot police.
Another report confirms that Germany will accede to a 'soft bailout' for the Spanish banks which will not impose the conditionality that was forced on Greece, Portugal and Ireland.
http://srv00.epimg.net/pdf/elpais/1aPagina/2012/06/ep-20120607.pdf

The United Nations is an evil organisation. The European Union is another evil organisation. Evil organisations must be destroyed.

[DCon]

Just downgrade every country and get it over with


Fitch Downgrades Spain to 'BBB'; Outlook Negative

http://www.zerohedge.com/news/fitch-follows-sp-slashes-spain-3-notches-bbb-only-moody-left-step-3-collateral-downgrade-immine

[PaddyJoe]

Friday's El Pais leads with a previously unreported 9 billion euro shortfall in two regional banks in Catalonia and Galicia
http://srv00.epimg.net/pdf/elpais/1aPagina/2012/06/ep-20120608.pdf
Madrid has already injected 2.4 billion in Novagalicia and 2.9 billion in Caixa Catalunya and hold over 90% of the shares in each of them.

[C. Flower]

Friday's El Pais leads with a previously unreported 9 billion euro shortfall in two regional banks in Catalonia and Galicia
http://srv00.epimg.net/pdf/elpais/1aPagina/2012/06/ep-20120608.pdf
Madrid has already injected 2.4 billion in Novagalicia and 2.9 billion in Caixa Catalunya and hold over 90% of the shares in each of them.

Want to hazard a guess about the scale of Spanish property (and other) losses?

Clearly, from observation, many, many times bigger than the Irish collapse.

And with unemployment and evictions at the levels they are at, much worse than either Ireland or Greece in knock on to the wider economy.

But Spain is a very large economy, with much more productive capacity and natural resources.

[DCon]

Weekend calls..


Spain is expected to make a request over the weekend for a financial package to prop up its troubled banks, two senior EU officials and one German source said on Friday.

The request would follow a conference call of euro zone finance ministers on Saturday, the two EU officials said. A Eurogroup statement would also be released.

"The announcement is expected for Saturday afternoon," one of the EU officials told Reuters.

http://www.reuters.com/article/2012/06/08/us-spain-banks-aid-idUSBRE8570DX20120608

[C. Flower]

Weekend calls..

http://www.reuters.com/article/2012/06/08/us-spain-banks-aid-idUSBRE8570DX20120608

Battles still going on with the miners.

Spain surely doesn't have that much to cut, with 25% unemployment?

[PaddyJoe]

Madrid state TV schedules a Western called 'Rescate' for this evening.
Somebody's got a sense of humor. 'Rescate' means 'rescue' or more recently 'bailout'
:D
http://i48.tinypic.com/t560s9.jpg

[C. Flower]

http://online.wsj.com/article/SB10001424052702303665904577455201749039194.html?m od=googlenews_wsj

IMF Stability Report says Spain needs 46 billion euros to buffer the banks.

It seems that Spain does not want to tap the EFSF, in spite of its relative cheapness.

http://www.google.com/hostednews/ap/article/ALeqM5gbF5dWKH9m4nCA38isWJp7YdfFjw?docId=644e3904e 07d48a6a0c8caec3989c6ce

Namawinelake says -


Spain seek to seek €100bn for banks - €40bn for imminent losses/liquidity and €60bn for capital buffer. But why wouldn't they seek bailout++

[C. Flower]

EU finance ministers conference call is over. Sky reporter is tweeting that Spain will ask for funding, there will be no "Programme" of terms and conditions, and the upper limit will be 100 billion euro.

[C. Flower]

I'm just wondering why this is being handled via a conference call. We've seen the Fin Mins week after week assembling and taking their photocalls and piling into private meetings.

Now, when they are discussing the EU's biggest ever bailout, it's a conference call.

Hardly serious.

Perhaps it would be difficult for them all to sit around the tennis-court sized table and look each other in the eyes a few days after Merkel has said there should be a two speed Europe.

Perhaps no-one believes that Germany will vote through the ESM and the Spanish bailout ?

It is all gone beyond a joke at this stage.

[riposte]

I'm just wondering why this is being handled via a conference call. We've seen the Fin Mins week after week assembling and taking their photocalls and piling into private meetings.

Now, when they are discussing the EU's biggest ever bailout, it's a conference call.


Nobody can photo them doing their dirty deeds when they do it over the phone.

[DCon]

according to zerohedge a deal has been reached for 100 billion. The IMF Will be involved and the EFSF I assume. Where Will Spain get their ESM contribution from I wonder?

[C. Flower]

according to zerohedge a deal has been reached for 100 billion. The IMF Will be involved and the EFSF I assume. Where Will Spain get their ESM contribution from I wonder?

And Ireland ?

[C. Flower]

Nobody can photo them doing their dirty deeds when they do it over the phone.

An Incorporeal Meeting :D

[Dr. FIVE]

Italy by xmas then?

[riposte]

The great thing about the EU is ... we are all equal.

[C. Flower]

The Irish Finance Minister's Statement has just come out.


Meenan, Brian
7:37 PM (27 minutes ago)

to Brian
Minister for Finance Statement on Eurogroup Teleconference

The Minister for Finance, Michael Noonan T.D., participated in today’s Eurogroup teleconference on Spain. After the conclusion of this teleconference, the Minister said:

“I welcome the significant announcement that has been made in relation to European assistance for the Spanish banking system. Today’s announcement is a collective response by eurozone member states to assist in resolving the difficulties in the Spanish banks.

This announcement will provide much needed confidence and stability in the Eurozone and this will be particularly important for Ireland’s economy as the eurozone crisis has weighed on our economic growth over the past year.”

In relation to the likely financial assistance for Spain, the Minister said:

“The European authorities will provide up to €100 billion to fully recapitalise the Spanish banks and to provide a significant safety margin beyond the recapitalisation requirements. The funds will be provided through the EFSF/ESM at the same interest rates which apply to funds provided to other programme countries.

The Spanish programme of assistance is providing funds for the financial sector and as such the conditionality of the programme will apply to this sector. Similar to existing programmes of assistance the European funds provided to Spain will be the responsibility of the Spanish sovereign.”

9 June 2012

No matter how many times Noonan writes the word "programme" he will not persuade us that Spain has the same terms as Ireland.

It would be good of him too if he would say how much Ireland will contribute to the Spanish bailout.

I would like to know what Noonan's contribution to the teleconference was i.e. exactly what did he say (if anything).

[Ephilant]

Some bailouts are more equal than others?

[C. Flower]

Italy by xmas then?

Much sooner. The Italian banks are emptying into Germany as we sit here.

There are general warnings out from Fitch and Moody's that if Greece leaves the Eurozone there will be another round of general downgradings across the Eurozone.

[DCon]

Some pertinent questions from zerohedge


1. Where will the money come from?

The problem with the EFSF is that there is about €200 billion in dry powder. And this includes the Spanish quota of €93 billion, which we can only assume is now officially scrapped.



2. Where will the money go?

As was noted previously, the bailout will come in the form of a loan, which while at better terms than market, will still result in a material increase in Spanish debt/GDP. In other words, while the bailout itself may have been without sovereign conditions, it will still impair the country in the eyes of sovereign creditors. And just as important is the mention that the loan will have "better terms than market" - this implies added security compared to general Spanish obligations. Hence priming.



3. What happens to Spanish sovereign debt?


4. Precedent

Naturally with Spain now officially biting the bullet, the only question remaining is: when is Italy going to drop next.

And ironically, what just happened, is that the Eurozone, with the tacit agreement of Germany, essentially gave insolvent banks a green light to short themselves into a full bailout.


5. Market reaction

The long-term reaction is obvious: this latest confirmation that Europe is a sinking ship has been predicted by many for years. As such, that European risk markets will continue sinking, and capital flows continue rushing to Germany, is a given.

http://www.zerohedge.com/news/spain-greece-after-all-here-are-main-outstanding-items

[Newsy]

Meenan, Brian
7:37 PM (27 minutes ago)

to Brian
Minister for Finance Statement on Eurogroup Teleconference

The Minister for Finance, Michael Noonan T.D., participated in today’s Eurogroup teleconference on Spain. After the conclusion of this teleconference, the Minister said:

“I welcome the significant announcement that has been made in relation to European assistance for the Spanish banking system. Today’s announcement is a collective response by eurozone member states to assist in resolving the difficulties in the Spanish banks.

This announcement will provide much needed confidence and stability in the Eurozone and this will be particularly important for Ireland’s economy as the eurozone crisis has weighed on our economic growth over the past year.”

In relation to the likely financial assistance for Spain, the Minister said:

“The European authorities will provide up to €100 billion to fully recapitalise the Spanish banks and to provide a significant safety margin beyond the recapitalisation requirements. The funds will be provided through the EFSF/ESM at the same interest rates which apply to funds provided to other programme countries.

The Spanish programme of assistance is providing funds for the financial sector and as such the conditionality of the programme will apply to this sector. Similar to existing programmes of assistance the European funds provided to Spain will be the responsibility of the Spanish sovereign.”

Firstly, how it this so important for the Irish economy?

And second, from his last sentence, is this primary bailout of the banks tied to the sovereign, like ourselves? His statement implies that it is??

How can noonan 'welcome' such a development? Can't he see what it is doing to ourselves, the Greeks etc. Can't he see that this 'bailout' lark is going to go on and on and on until there will be a centralised 'power' in the region of Germany, most of the rest of the 'European' economies will be desimated (drones) and all the while the queen sits in the middle, sucking the like out of the rest of us.

[DCon]

another pertinent question


Yanis Varoufakis ‏@yanisvaroufakis

Why should Spain, & not Ireland, avoid a crushing austerity program when borrowing for its banks? Is it not time for the Irish to rebel?

https://twitter.com/#!/yanisvaroufakis

[yehbut_nobut]

Finland states they want guarantees


Finnish Finance Minister Jutta Urpilainen said Saturday discussions continue on details of a bailout plan for Spanish banks and that Helsinki may demand guarantees in exchange for the aid.

"It is clear that the bailout plan will happen," the minister told a press conference...

The Minister warned however that "if the funds are taken from the European Financial Stability Facility [1], Finland will request guarantees."

But if they were taken from the permanent rescue fund, the European Stability Mechanism [2], Finland will not demand guarantees as it would carry less risks for Finnish taxpayers, said the minister as quoted by public radio YLE.

http://online.wsj.com/article/BT-CO-20120609-701342.html

[1] This is the facility that currently applies

[2] This is the new "Stability Treaty", which we just voted on, but which Spain has yet to ratify. (Only France, Greece and Slovenia have so far done so).

[yehbut_nobut]

More from Bloomberg: Finnish guarantees = Collateral

Finland’s Demands

Finland will demand collateral for the loans if they come from the temporary European Financial Stability Facility, Finance Minister Jutta Urpilainen told reporters. Ministers haven’t decided whether that fund or its permanent successor, the European Stability Mechanism, will be used, Urpilainen and de Guindos said. Should the ESM provide the funds, the loans would be senior to outstanding government debt, given Spain’s EU lenders protection at the expense of bondholders.
http://www.bloomberg.com/news/2012-06-09/spain-asks-for-125-billion-bank-bailout-as-crisis-worsens-1-.html

[DCon]

More from Bloomberg: Finnish guarantees = Collateral

the loans would be senior to outstanding government debt, given Spain’s EU lenders protection at the expense of bondholders


and next?


Moody's Investors Service said Friday that it may consider downgrading debt ratings for some eurozone nations if Spain seeks a bailout for its banking sector or Greece ends up dropping the euro as its national currency.

The ratings firm said it is assessing the implications of a bailout for Spain and is prepared to make rating changes to reflect any heightened risk for Spain's government creditors.

There's growing speculation that Spain could decide within days or weeks to ask the European Union for a bailout for its banks, which have been crippled by soured real estate investments.

If Spain ends up asking for aid, that would make it the fourth country in the 17-member eurozone to do so since the EU debt crisis broke out.

Under Moody's rating scale, Spain now has a rating of "A3," which is still investment-grade. But the outlook is "negative," which means there's at least a 40 percent chance Moody's will downgrade its ratings for Spain."

[C. Flower]

Tim Geithner happy - another step towards the USE.

http://www.treasury.gov/press-center/press-releases/Pages/tg1610.aspx

[Sam Lord]

Can someone tell me why the Spanish banks just did not borrow what they needed from the 1 trillion provided to banks by the ECB a few months ago at 1% interest?

[C. Flower]

If the funds come from the EFSF ( I think I read that they will) Ireland will not have to contribute while in the Programme.

If it's the ESM, we will - http://www.thejournal.ie/noonan-welcomes-spanish-request-for-banking-bailout-480928-Jun2012/

Ireland is obliged to contribute a minimum of 1.274 billion euro by the end of 2013.

If the funding comes from the ESM, an additional 1.59 % of the 100 billion will be going to Spain.

[Sam Lord]

Just so you know like. Stephen Harper will not have the hard working Canadian taxpayer bailing out you feckless Europeans and your busted banks.

Sorry.

http://www.theglobeandmail.com/news/politics/harpers-refusal-to-help-bail-out-europe-draws-germanys-ire/article4240996/

[DCon]

Can someone tell me why the Spanish banks just did not borrow what they needed from the 1 trillion provided to banks by the ECB a few months ago at 1% interest?

they used that to buy Spanish debt


Domestic investors, including banks, pension funds and insurance companies, own 67 percent of Spain’s bonds. Yet despite the perils to both the banks and the government, the incentives are still in place for lending institutions to keep accumulating these high-risk securities.

As long as the Spanish government does not default and demand for loans in the recession-mired economy remains negligible, lending to the government remains in many respects the only game in town for banks. Moreover, they can borrow cheaply from the European Central Bank and make a nice return lending the money to their own government.

“If you are a Spanish bank its very profitable to borrow at 1 percent and lend at 6 percent,” said Santiago Lopez, a banking analyst in Madrid for Exane BNP Paribas. “The risk is that Spain defaults on its bonds, and if that happens you are bust anyway.”

http://www.nytimes.com/2012/06/08/business/global/madrid-leans-on-its-troubled-banks-for-financing.html?_r=1

[C. Flower]

http://t.co/oDlYVw6O


9 June 2012
Eurogroup statement on Spain

The Eurogroup supports the efforts of the Spanish authorities to resolutely
address the restructuring of its financial sector and it welcomes their intention
to seek financial assistance from euro area Member States to this effect.
The Eurogroup has been informed that the Spanish authorities will present a
formal request shortly and is willing to respond favourably to such a request.
The financial assistance would be provided by the EFSF/ESM for
recapitalisation of financial institutions.

The loan will be scaled to provide an
effective backstop covering for all possible capital requirements estimated by
the diagnostic exercise which the Spanish authorities have commissioned to
the external evaluators and the international auditors. The loan amount must
cover estimated capital requirements with an additional safety margin,
estimated as summing up to EUR 100 billion in total.
Following the formal request, an assessment should be provided by the
Commission, in liaison with the ECB, EBA and the IMF, as well as a proposal for the necessary policy conditionality for the financial sector that shall
accompany the assistance.

The Eurogroup considers that the Fund for Orderly Bank Restructuring
(F.R.O.B.), acting as agent of the Spanish government, could receive the
funds and channel them to the financial institutions concerned. The Spanish
government will retain the full responsibility of the financial assistance and will sign the MoU.

The Eurogroup notes that Spain has already implemented significant fiscal
and labour market reforms and measures to strengthen the capital base of
the Spanish banks. The Eurogroup is confident that Spain will honour its
commitments under the excessive deficit procedure and with regard to
structural reforms, with a view to correcting macroeconomic imbalances in
the framework of the European semester. Progress in these areas will be
closely and regularly reviewed also in parallel with the financial assistance.
Beyond the determined implementation of these commitments, the
Eurogroup considers that the policy conditionality of the financial assistance
should be focused on specific reforms targeting the financial sector, including restructuring plans in line with EU state-aid rules and horizontal structural
reforms of the domestic financial sector.

We invite the IMF to support the implementation and monitoring of the
financial assistance with regular reporting.

[Sam Lord]

they used that to buy Spanish debt



So what is the difference with the additional 100 billion being made available (at probably higher interest reates)? Will they not do the same with that? How does it "recapitalise" them?

(Please excuse my financial ignorance)

[Sam Lord]

The Eurogroup notes that Spain has already implemented significant fiscal
and labour market reforms and measures to strengthen the capital base of
the Spanish banks.


Who knew that fiscal and labour market "reforms" were designed to strengthen the capital base of banks.

[DCon]

So what is the difference with the additional 100 billion being made available (at probably higher interest reates)? Will they not do the same with that? How does it "recapitalise" them?

(Please excuse my financial ignorance)

the new money will be backed by the State so the banks are less likely to fail/more intertwined with the sovereign (good if you are a bank)

The first money was so cheap they used it to buy debt with a higher rate so they could make profit (good if you are a bank). This profit will likely cover the new money (good if you are a bank)

Spanish people get screwed, Spanish banks and banks in general do good.

[MPB]

they used that to buy Spanish debt



http://www.nytimes.com/2012/06/08/business/global/madrid-leans-on-its-troubled-banks-for-financing.html?_r=1

+1.

This explains the nonsense of bailing out these insolvent Banks.

They are loaned money and we have to pay their mortgage. The EU/IMF/ECB gives them our money and forces us to repay the interest on our own loans.

We pay twice. In fact we pay three times, because we get to repay the money we borrowed, then get to repay the money they borrowed in order to lend to us and then get to repay the money they lost when they did not get repaid for the money lent to Johnny Ronan et al.

We get to repay everybodies mortgage and then they tell us we are being bailed out.

There are a couple of bits of good news in all of this. Firstly we now get to find out for real if the FG/LAB emperors are wearing no clothes.

Secondly we now discover that the EU/ECB/IMF don,t have the funds to bailout Europes Banking system, now that they have discovered that Europes taxpayers can,t afford to do it for them.

100 billion for the Spanish Banking system is a joke. It is about 400 billion plus short.

By the way, does anybody realise that the European taxpayers are still funding any bailout funds.

I know everybody is scared witless about a collapse of the euro, but we really would be better off at this stage.

[DCon]

Rajoy 'regrets' not doing a Lenihan


Mr Rajoy on Sunday expressed regret that Spain had not bailed out its struggling domestic banks three years ago along with other European Union members such as the UK, but said the credit line agreed among eurozone finance ministers on Saturday was essential to restore confidence and help banks provide credit to the real economy.

http://www.ft.com/intl/cms/s/0/4599be98-b2ed-11e1-83a9-00144feabdc0.html#axzz1xOxi0wzW

[C. Flower]

http://t.co/oDlYVw6O

The Eurogroup statement has not particular legal standing of course.

For the EFSF to be used, each participating government will have to make an agreement.

For the ESM to be used, it would have to be ratified.

What happened yesterday was a telephone call and some kind of verbal agreement between Finance Ministers.

[Ephilant]

The Eurogroup statement has not particular legal standing of course.

For the EFSF to be used, each participating government will have to make an agreement.

For the ESM to be used, it would have to be ratified.

What happened yesterday was a telephone call and some kind of verbal agreement between Finance Ministers.

I'm not having a dig now, but weren't the Irish the only ones who could have stopped that ratification, and can't anymore? Or have I got that wrong?

[C. Flower]

I'm not having a dig now, but weren't the Irish the only ones who could have stopped that ratification, and can't anymore? Or have I got that wrong?

We are still waiting for the outcome of a case being taken by an independent TD, Thomas Pringle, to see if we will have a referendum on the ESM.

But it is quite possible that other States, Germany included, might not ratify it.

The Referendum would not have automatically stopped the ESM, but might have put a few flies in the ointment.

[PaddyJoe]

It looks like Finland are demanding collateral for their share of the Spanish bailout just as they did with Greece
http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2012/06/09/bloomberg_articlesM5D5X86JTSE801-M5D8Z.DTL

[DCon]

Spain is not Uganda! I thought they would be happy not being Ireland or Greece

http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2012/06/Spain%20Uganda%20sms.jpg

http://www.zerohedge.com/news/rajoy-de-guindos-spain-not-uganda

[C. Flower]

Germany is not Zimbabwe!

Not yet, anyway.

[DCon]

It looks like Finland are demanding collateral for their share of the Spanish bailout just as they did with Greece
http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2012/06/09/bloomberg_articlesM5D5X86JTSE801-M5D8Z.DTL

here's why


If the cash were to come from the ESM, its treaty provides it with preferred creditor status, junior only to the International Monetary Fund. The EFSF isn’t explicitly a preferred creditor, prompting Finland’s Finance Minister Jutta Urpilainen to demand collateral if the facility were used to advance the money. Even so, the Greek example showed that official lenders aren’t willing to accept losses, preferring to force private bondholders to take greater writedowns in a restructuring.

http://www.bloomberg.com/news/2012-06-10/spanish-bondholders-to-rank-behind-official-loans-after-bailout.html

[PaddyJoe]

Just a thought here. Spain are one of the biggest contributors to the EFSF and the planned ESM.
What happens to that contribution now?
Do they still have to stump up?

[DCon]

Just a thought here. Spain are one of the biggest contributors to the EFSF and the planned ESM.
What happens to that contribution now?
Do they still have to stump up?

Apparently, countries in a programme do not contribute

I am not sure on the fine print though.

[TotalMayhem]

http://img339.imageshack.us/img339/9756/201206110011.jpg

pwned...

[C. Flower]

Just a thought here. Spain are one of the biggest contributors to the EFSF and the planned ESM.
What happens to that contribution now?
Do they still have to stump up?

Isn't that 98 billion that Spain was going to put into the ESFS, gone out of it?

They will have to pay into the ESM though.

[PaddyJoe]

The Eurogroup statement on Spain:

Eurogroup statement on Spain
The Eurogroup supports the efforts of the Spanish authorities to resolutely address the restructuring of its financial sector and it welcomes their intention to seek financial assistance from euro area Member States to this effect.
The Eurogroup has been informed that the Spanish authorities will present a formal request shortly and is willing to respond favourably to such a request. The financial assistance would be provided by the EFSF/ESM for recapitalisation of financial institutions. The loan will be scaled to provide an effective backstop covering for all possible capital requirements estimated by the diagnostic exercise which the Spanish authorities have commissioned to the external evaluators and the international auditors. The loan amount must cover estimated capital requirements with an additional safety margin, estimated as summing up to EUR 100 billion in total.
Following the formal request, an assessment should be provided by the Commission, in liaison with the ECB, EBA and the IMF, as well as a proposal for the necessary policy conditionality for the financial sector that shall accompany the assistance.
The Eurogroup considers that the Fund for Orderly Bank Restructuring (F.R.O.B.), acting as agent of the Spanish government, could receive the funds and channel them to the financial institutions concerned. The Spanish government will retain the full responsibility of the financial assistance and will sign the MoU.
The Eurogroup notes that Spain has already implemented significant fiscal and labour market reforms and measures to strengthen the capital base of the Spanish banks. The Eurogroup is confident that Spain will honour its commitments under the excessive deficit procedure and with regard to structural reforms, with a view to correcting macroeconomic imbalances in the framework of the European semester. Progress in these areas will be closely and regularly reviewed also in parallel with the financial assistance.
Beyond the determined implementation of these commitments, the Eurogroup considers that the policy conditionality of the financial assistance should be focused on specific reforms targeting the financial sector, including
9 June 2012
restructuring plans in line with EU state-aid rules and horizontal structural reforms of the domestic financial sector.
We invite the IMF to support the implementation and monitoring of the financial assistance with regular reporting.

http://estaticos.elmundo.es/documentos/2012/06/10/espana.pdf

[DCon]

Spain is not Uganda! I thought they would be happy not being Ireland or Greece

http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2012/06/Spain%20Uganda%20sms.jpg

http://www.zerohedge.com/news/rajoy-de-guindos-spain-not-uganda

more on this


Translation: We're a major power, not some random IMF-case banana Republic.

The followup message (according to Google translate) "if you want to force the redemption of Spain will prepare 500,000 billion euros and another 700,000 for Italy, which will have to be rescued after us."

Bottom line: hold out for something good. We are powerful, and if they don't give in, the whole thing will go down. It will cost Europe 500 billion if Spain goes bust, and then another 700 billion if Italy goes bust.


http://www.businessinsider.com/the-text-of-rajoys-text-message-to-guindos-2012-6

Was Germany just checkmated?

[Dr. FIVE]

Irish decide against asking Europe for better terms


http://www.independent.co.uk/news/world/europe/irish-decide-against-asking-europe-for-better-terms-7834910.html

[PaddyJoe]

Irish decide against asking Europe for better terms


http://www.independent.co.uk/news/world/europe/irish-decide-against-asking-europe-for-better-terms-7834910.html

Brian Hayes talking out of his backside. There's no conditionality for the State on Spain's 'rescate'
The focus is carefully put on their banks:

The Eurogroup notes that Spain has already implemented significant fiscal and labour market reforms and measures to strengthen the capital base of the Spanish banks. The Eurogroup is confident that Spain will honour its commitments under the excessive deficit procedure and with regard to structural reforms, with a view to correcting macroeconomic imbalances in the framework of the European semester. Progress in these areas will be closely and regularly reviewed also in parallel with the financial assistance.
Beyond the determined implementation of these commitments, the Eurogroup considers that the policy conditionality of the financial assistance should be focused on specific reforms targeting the financial sector,

[DCon]

Farage on Sky News

http://www.youtube.com/watch?v=OxgwI-0Sozg&feature=player_embedded

http://www.zerohedge.com/news/farage-spanish-bailout-reinforcement-failure

[DCon]

The Markets were happy for a night. Not so now


zerohedge ‏@zerohedge

Italy 10Y rises over 6%. "Europe is fixed"

€100 billion has failed. Perhaps a €200 billion Spanish bailout will do the trick?

Spain 10 Yr 6.36%. Was under 6% earlier

EU OFFICIAL SAYS GLAD MARKETS REACTED POSITIVELY TO SPAIN DEAL -> EURUSD +50 pips?

http://twitter.com/#!/zerohedge

[C. Flower]

When people can make money out of falling markets the logical thing for them to do is the drive down the weakest, then, when it is gone, move on to the next weakest.

[DCon]

here's why



http://www.bloomberg.com/news/2012-06-10/spanish-bondholders-to-rank-behind-official-loans-after-bailout.html

The EU are trying to avoid bondholder concerns by funding Spain from the EFSF now


The loan to Spain could come from the EFSF to to avoid the ESM’s preferred creditor status, an EU official tells Reuters.

Bailout could be transferred to ESM but loans already extended would not become senior to other debt, the official says.


http://www.forexlive.com/blog/2012/06/11/eu-trying-to-fudge-the-subordination-problem/

[DCon]

Schauble says he wants the ESM used, not the EFSF




German Finance Minister Wolfgang Schaeuble wants aid for Spain’s banks to come from the future permanent backstop, the European Stability Mechanism, to avoid greater risks for the German budget, Handelsblatt said.



Spain would not be able to guarantee loans from the current backstop, the European Financial Stability Facility, if funds for its banks came from the EFSF, the newspaper said, citing European Union diplomats it didn’t name.



Germany’s share of guarantees to the EFSF would rise in such an event, the newspaper said. The ESM is financed by all 17 euro-region countries, including those that receive funds from it, the newspaper said.


http://www.zerohedge.com/news/schauble-wants-esm-be-used-over-efsf-spanish-bailout

[DCon]

Spain is due to provide 11.9% of the ESM funding

Page 61 of the below

http://www.european-council.europa.eu/media/582311/05-tesm2.en12.pdf

[DCon]

The Markets were happy for a night. Not so now


zerohedge ‏@zerohedge

Spain 10 Yr 6.36%. Was under 6% earlier

http://twitter.com/#!/zerohedge

up to 6.58% this morning

[DCon]

Yanis talking to the lovely Lauren about Spain's bailout. He compares the Spanish situation to our own.

http://www.youtube.com/watch?v=9tqeDC7dUHg&feature=player_embedded

As an aside, TV3 should spring to get Lauren on VB. She would immediately be promoted to head Brown's girl

[C. Flower]

up to 6.58% this morning

Went over 6.7% today, and Fitch has downgraded another 18 Spanish banks.

The 100 billion extra debt that the Spanish Government has taken on does not make them more attractive to lend to.

http://www.irishtimes.com/newspaper/breaking/2012/0612/breaking19.html

[DCon]

Already?


zerohedge ‏@zerohedge

Spain already needs second bailout: Rajoy Calls for EU Liquidity Support in Letter to Barroso


https://twitter.com/#!/zerohedge

[PaddyJoe]

Eurostat confirmed that the bailout will affect Spain's debt and it's budget deficit.

The Spanish government is set to borrow from the EFSF or the ESM with the purpose of recapitalising parts of its banking sector. There are two parts to this operation to be recorded: the loan to the Spanish authorities, and the recapitalisation of the banks.
According to the information available to Eurostat, the operation will be technically channelled via the FROB (Fondo de Reestructuración Ordenada Bancaria), which, in statistics, is classified in the Spanish government sector.
The impact of the loan
The loan taken by the Spanish government will directly increase the Spanish government debt. There will also be a direct deficit impact for Spain for the interest expenditure on the loan. Neither the amounts, nor the conditions, are however known at this stage.
http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/INFONOTE_SPAIN/EN/INFONOTE_SPAIN-EN.PDF

[PaddyJoe]

There's a good piece in the NYT today looking at the negotiations over the last month which finally led to the Spanish deal:

MADRID/BERLIN (Reuters) - In Chicago, they know about offers you can't refuse.

So when Angela Merkel asked Spain's prime minister out for a boat ride on the Chicago River, last resting place of more than one unfortunate who got too deep in debt, Mariano Rajoy may have had cause for unease over what the German leader would tell him.

Any sense of foreboding wasn't misplaced.

That Sunday cruise in May aboard the "First Lady" before a NATO summit hosted by U.S. President Barack Obama, sank any hope the chancellor might let his government off the hook for a fix to plug big holes in the accounts of Spanish banks and brought Rajoy, three weeks later, to swallow pride and accept a huge EU bailout which Berlin had quietly been urging on him for months.
http://www.nytimes.com/reuters/2012/06/13/business/13reuters-eurozone-spain-loveboat.html?_r=1&src=busln

[MPB]

There's a good piece in the NYT today looking at the negotiations over the last month which finally led to the Spanish deal:

http://www.nytimes.com/reuters/2012/06/13/business/13reuters-eurozone-spain-loveboat.html?_r=1&src=busln

In wrestling parlance the Germans seem to be slowly manouvering the Sovereign Nations of the eurozone, one by one, into a Boston Strangle hold.

Use the ECB to threaten the Banking system of the country, then force the Banks of that country to recapitalise the German Banking system, while holding the sovereign responsible for the repayments of the laundered German Bank money.

And then, last but not least and still to come, use the weakening position of the sovereign vis a vis access to the soverign bondmarkets to force more German money onto the already over loaded sovereign debt and then use this lifeline to enforce German terms and conditions on the inner workings of the once independent sovereign.

The French were right to worry about the ambitions of Germany, once they had been reunited.

A unification the rest of Europe funded by the way.

If the bailout junky Germany, ends up running Europe it will be the biggest irony in history.

[DCon]

Spain downgraded by Egan Jones


from 2008 to 2011, Spain's GDP declined from EUR1.09 trillion to EUR1.07 trillion. Meanwhile, its debt mushroomed from EUR519B to EUR806B. With the EUR100B infusion for Spain's banks, the debt to GDP will rise to 90% plus future additions for the government deficit, support for its regions and additional support for its banks. Social benefits are a major problem; while payments to the govt have been down EUR 3B (2008 to 2011), payments from the government have been up EUR 29B). As a result, Spain is short about EUR50B per year for social payments, EUR35+B per year for interest, and an additional EUR 30B for asset growth; hence the EUR110+B per annum increase in debt. As we expected, Spain requested support for its banking sector and will probably need cash for weaker provinces. Assets of Spain's largest two banks exceed its GDP. We are slipping our rating to " CCC+

http://www.zerohedge.com/news/egan-who-just-gave-spain-triple-hooks

[ang]

MOODYS DOWNGRADES SPAIN TO Baa3 FROM A3 - H/T Zerohedge

[DCon]

And Moody's


zerohedge ‏@zerohedge

MOODYS DOWNGRADES SPAIN TO Baa3 FROM A3

https://twitter.com/#!/zerohedge

[C. Flower]

In wrestling parlance the Germans seem to be slowly manouvering the Sovereign Nations of the eurozone, one by one, into a Boston Strangle hold.

Use the ECB to threaten the Banking system of the country, then force the Banks of that country to recapitalise the German Banking system, while holding the sovereign responsible for the repayments of the laundered German Bank money.

And then, last but not least and still to come, use the weakening position of the sovereign vis a vis access to the soverign bondmarkets to force more German money onto the already over loaded sovereign debt and then use this lifeline to enforce German terms and conditions on the inner workings of the once independent sovereign.

The French were right to worry about the ambitions of Germany, once they had been reunited.

A unification the rest of Europe funded by the way.

If the bailout junky Germany, ends up running Europe it will be the biggest irony in history.

Spot on. A big power has to act like a big power.

[MPB]

Spot on. A big power has to act like a big power.

The bigger they are the harder they fall.

Germany is on the cusp of being a big power, but right now it is at its most vulnerable.

A well directed kick in the stones, sometime in the next 6 months, will it bring it to its knees.

It got puppet Govts in Spain, Italy, Portugal, Greece and Ireland, but it did,nt get what it wanted in France and is about to get its comeuppance in Greece.

Next year it is Merkels turn to walk the plank.

It never was very good at taking over Europe. I wonder who will be willing to bail them out this time?

[PaddyJoe]

The Spanish Finance Ministry contradicts EC vice president Joaquin Almunia and denies that any bank will be wound down as part of the bailout deal.
Meanwhile, Thursday's El Pais leads with the EU's irritation with PM Mariano Rajoy because of the way he spun the bailout as a victory for Spain which didn't entail any conditions and then promptly headed for the Euros in Poland.
Dublin and Lisbon are now looking for 'equivalent treatment' and the EZ is in a difficult situation with only days to go before the Greek election
http://srv00.epimg.net/pdf/elpais/1aPagina/2012/06/ep-20120614.pdf

[PaddyJoe]

Rajoy has called an emergency cabinet meeting as the 10 year bond yield hits 7%.

[morticia]

Splut, Splat, Sploop, the sound of brown stuff hitting ye proverbial fan.

[C. Flower]

With one deft move, the private debts of banks (institutions not known to be much into charitable donations, or profit-sharing with the public) have been foisted on to the Spanish national debt.

It's not surprising that the cost of borrowing by the Spanish state has now gone up.

http://www.breakingnews.ie/business/spanish-borrowing-costs-trigger-ftse-losses-555397.html

Have people in Spain opposed this at all, or, like us here in Ireland, were they crushed without resistance ?

[PaddyJoe]

With one deft move, the private debts of banks (institutions not known to be much into charitable donations, or profit-sharing with the public) have been foisted on to the Spanish national debt.

It's not surprising that the cost of borrowing by the Spanish state has now gone up.

http://www.breakingnews.ie/business/spanish-borrowing-costs-trigger-ftse-losses-555397.html

Have people in Spain opposed this at all, or, like us here in Ireland, were they crushed without resistance ?

Judging by the media there they seem to be in a state of shock. It's all very reminiscent of November 2010 when the bailout was announced here.
The opposition PSOE is more or less going along with the government and keeping criticism muted "in the national interest"
The shock is wearing off very quirky though. Look out for concerted opposition from the unions, the regional nationalist parties and the left gathering steam over the next few weeks.
Meanwhile the Austurian miners are shutting down roads and railways and fighting pitched battles with police.

[MPB]

With one deft move, the private debts of banks (institutions not known to be much into charitable donations, or profit-sharing with the public) have been foisted on to the Spanish national debt.

It's not surprising that the cost of borrowing by the Spanish state has now gone up.

http://www.breakingnews.ie/business/spanish-borrowing-costs-trigger-ftse-losses-555397.html

Have people in Spain opposed this at all, or, like us here in Ireland, were they crushed without resistance ?

Getting out on the streets is a waste of time.

Just stop paying. Ignore your Govt. Refuse to pay extra taxes.

Your refusal will outlast their existance.

[PaddyJoe]

EU Competition Commissioner Joaquin Almunia is flying to Madrid tomorrow to meet Rajoy. It seems that he's going to be the guy in charge of the Spanish banking bailout and the PP aren't happy because he's already said that some banks will be wound down.
What adds spice to it is that he was a PSOE appointment to Brussels and the PP have spent the last few months busily replacing the PSOE people with their own all over the public services.
:D

[DCon]

Spain's 10 year bonds - 7.185%

[C. Flower]

Getting out on the streets is a waste of time.

Just stop paying. Ignore your Govt. Refuse to pay extra taxes.

Your refusal will outlast their existance.

That doesn't work on PAYE. But organised refusal, of whatever can be refused, across Europe, will have an effect.

[Ephilant]

That doesn't work on PAYE. But organised refusal, of whatever can be refused, across Europe, will have an effect.

We did that here for years, and they all started calling us names:rolleyes:

[ang]

Barroso says Europe expects formal aid request from Spain.

[DCon]

remember when Spain only needed EUR 100,000,000,000?


zerohedge ‏@zerohedge

Spain May Need EU250b Bailout, ’Too Large’ for EFSF: ING

[DCon]

Anothervisit from the Bailout doctor is looking likely

http://www.forexlive.com/wp-content/uploads/2012/06/spainyield1-330x237.jpg

[DCon]

They want to wait for ESM but might not have time

Does the EFSF have any money??


BRUSSELS (MNI) - Eurozone governments would prefer to use the new
permanent bailout fund, the European Stability Mechanism, to finance an
aid programme for Spain's banking sector, but assistance might have to
come from the European Financial Stability Facility if aid is called for
before the ESM is ready, a senior EU official on Tuesday.

"There is a strong preference by many members of the Eurogroup to
use the ESM, but in technical terms it depend on the [ESM's] entry into
force," the official said.

"No one is ruling out the EFSF," he said.

https://mninews.deutsche-boerse.com/mni/mainwirex_description.jsp?serverKey=1340106832932&sessionId=48DC585F-4905-EB51-F430-6833808DF00A&un=jduffy@marketnews.com&sid=1

[PaddyJoe]

Interesting story from Reuters this evening on how Spain's deficit figures are going to be handled:

Reuters) - The European Union is working on a formula to limit the impact on Spain's public deficit of a bank rescue worth up to 100 billion euros by issuing very long loans at very low rates, a senior EU official said on Tuesday.

Obviously this is where all the speculation about longer maturities for Irish bailout loans is coming from.
http://www.reuters.com/article/2012/06/19/eu-spain-deficit-idUSL5E8HJGHJ20120619

[ang]

Interesting story from Reuters this evening on how Spain's deficit figures are going to be handled:


Obviously this is where all the speculation about longer maturities for Irish bailout loans is coming from.
http://www.reuters.com/article/2012/06/19/eu-spain-deficit-idUSL5E8HJGHJ20120619

Lots also about allowing EFSF/ESM bond buying programme but conflicting reports on that.

Meanwhile back in Spain - Spain pharma sounds alarm on regional debt threat -


* Regions run up 1.5 bln euros debt to drug firms since Jan. 1

* Drug consumption to fall 15-20 pct by end-2012

* Latest deficit-cutting measures will cost sector 3 bln euros

* Firms want government framework to invest for future

http://www.reuters.com/article/2012/06/19/spain-regions-pharmaceuticals-idUSL5E8HJETI20120619

[C. Flower]

Spain announces another bank audit coming in September. So then we find out just how wrong this first one was

62 billion euro, current estimate from two stress tests done today - but up from 1.6 billion euro, which was the last estimate.


Spain stress test: adverse scenario GDP -6.5%, house prices -26.4% & sees 55-60% peak to trough house price fall, banks need 6% core capital

[Dr. FIVE]

Our policy is to separate bank debt from public debt says Noonan who has us fooled all along it seems

[PaddyJoe]

Our policy is to separate bank debt from public debt says Noonan who has us fooled all along it seems

I''m sure Luis de Guindos will drop everything this evening at the Finance Minister's meeting and schedule a one on one with Noonan to pick his brains.

[DCon]

62 billion euro, current estimate from two stress tests done today - but up from 1.6 billion euro, which was the last estimate.

dodgy accounting at best


The expected loss is offset by EUR 98 billion of exiting provisions (which will have to be offset by something and if deposit outflows continue then this merely accelerates the under-capitalization); and
New profit generation of EUR 64-68 billion seems remarkable for a banking segment so tied to its sovereign and entirely bust itself
It seems clear that adjusting these for any sense of reality means the real loss (or capital deficit) will be well north of the EUR 100 billion assigned to the country.

http://www.zerohedge.com/news/what-oliver-wyman-really-said-about-spains-banks

[ang]

Olli Rehn says Spanish banks bailout "conditionality" will be focused on banking sector.

For once I call on Enda, Michael, Eamon and Lucinda to don the Green Jerseys and come out fighting for Ireland WE are the home team whom You are PAID and duty bound to fight for not the EU.

[DCon]

Olli Rehn says Spanish banks bailout "conditionality" will be focused on banking sector.

For once I call on Enda, Michael, Eamon and Lucinda to don the Green Jerseys and come out fighting for Ireland WE are the home team whom You are PAID and duty bound to fight for not the EU.

Our EU loving government will do nothing.

Spain will get a better deal.


Economy minister Luis de Guindos said yesterday that Madrid would formalise its EU loan request “in the next few days”, with the details of the deal being confirmed at the end of July.

Spanish prime minister Mariano Rajoy has said the deal will not carry conditions affecting government macroeconomic policy.

On Wednesday, finance minister Cristóbal Montoro upbraided opposition politicians for describing the loan as a “bailout”.



http://www.irishtimes.com/newspaper/finance/2012/0622/1224318455551.html

[C. Flower]

Massive demonstrations against the "Rescate" shown on Euronews, yesterday.

[DCon]

More special treatment?


SPAIN SAID TO WEIGH IMPOSING LOSSES ON JUNIOR BANK BONDHOLDERS


BURDENSHARING IS PART OF AGREEMENT ON BANK BAILOUT.

https://twitter.com/#!/zerohedge

[ang]

Do we have confirmation that ANY of the Irish delegation are included in these decisions anywhere along the process of "making them up" ?

[DCon]

Do we have confirmation that ANY of the Irish delegation are included in these decisions anywhere along the process of "making them up" ?

No.

Noonan is too busy forgiving the NAMA developers their personal guarantees to bother with any of that high Finance stuff

http://namawinelake.wordpress.com/2012/06/22/minister-confirms-that-nama-is-forgiving-personal-guarantees/

[DCon]

Spain have now denied there will be any Burning


Update: we have entered full retard rumor territory again:

GUINDOS SAYS NO PLAN TO APPLY LOSSES ON JUNIOR BANK BONDHOLDERS

In other words, no B-word; to summarize - Spain float rumors, does not like market response, denies rumor. Taxpayer rape must continue.

http://www.zerohedge.com/news/spain-utters-b-word-ruins-party

[ang]

Anti-austerity pensioners invade German consulate in Barcelona -

http://www.euronews.com/2012/06/22/anti-austerity-pensioners-invade-german-consulate-in-barcelona/#.T-WTe2oMWvA.twitter

[C. Flower]

Anti-austerity pensioners invade German consulate in Barcelona -

http://www.euronews.com/2012/06/22/anti-austerity-pensioners-invade-german-consulate-in-barcelona/#.T-WTe2oMWvA.twitter

"They have taken to occupying banks" :D

A whole generation has grown up in the credit bubble, which fostered the belief that rights, a living wage, public services etc. fall like manna from heaven, and don't need to be fought for. But there is also a healthy and active population of older people who knew these things back in the day. If they join up with the young, they will be a formidable force.

[C. Flower]

Spain has made a formal application for the 100 billion for the banks. It will be interesting to see the Memorandum of Understanding, expected to be signed in the next fortnight.

http://uk.reuters.com/article/2012/06/25/uk-spain-banks-idUKBRE85O08P20120625

[DCon]

Spain has made a formal application for the 100 billion for the banks. It will be interesting to see the Memorandum of Understanding, expected to be signed in the next fortnight.

http://uk.reuters.com/article/2012/06/25/uk-spain-banks-idUKBRE85O08P20120625

Spain are still pretending the money will go directly to the banks while Germany have always insisted that funding will go to the Sovereign

My money is on Germany

[ang]

As expected -


Moody's to downgrade Spain's banks in next hours

http://www.reuters.com/article/2012/06/25/spain-banks-moodys-idUSE8E8EU02P20120625

[C. Flower]

As expected -



http://www.reuters.com/article/2012/06/25/spain-banks-moodys-idUSE8E8EU02P20120625

28 banks downgraded. These bailouts really do work...:rolleyes:

[DCon]

Spanish banks set to cash in their chips from their investments in Spanish corporations

http://www.reuters.com/article/2012/06/26/us-spain-banks-stakes-idUSBRE85P0DJ20120626

[PaddyJoe]

It looks like Spain is going to pushed into a 'bad bank' NAMA type solution, according to El Publico today, quoting remarks by Luis De Guindos.

la Comisión Europea ha expresado su clara "preferencia" de que se ponga en marcha un mecanismo que recuerda a un banco malo que acumule todos los activos infectados, y el Ejecutivo piensa que no es mala solución.
The EC has expressed a clear preference for the setting up of a mechanism similar to a 'bad bank' which will take on all the toxic assets, and the Spanish government consider that this is not a bad solution.
http://www.publico.es/espana/438293/el-gobierno-cede-a-las-pretensiones-de-bruselas-y-acepta-un-banco-malo

[ang]

The EU liked NAMA. Remember FG Senator Eugene Regan lodged a formal objection to NAMA with the EU Commission in Brussels as being against state aid rules ?

[DCon]

Spain has cut free drugs to balance the books


The Spanish Ministry of Health is planning to ask patients to start paying for as many as 450 drugs that up until now had been offered free on the national health service. The cuts will save the government as much as 440 million euros a year, El Pais reports. This is the latest step in Mariano Rajoy’s drive to reduce health spending, which includes charging a majority of patients one euro for each prescription their doctor signs and asking higher earners to pay part of the price toward many other drugs.

http://go.bloomberg.com/euro-crisis/2012-06-27/spain-cuts-free-drugs-to-improve-health-of-government-budget/

[DCon]

some updates from the twitter machine


zerohedge ‏@zerohedge

EUROGROUP SAYS SPAIN TO REQUEST TECHNICAL ASSISTANCE FROM IMF.


zerohedge ‏@zerohedge

EUROGROUP WELCOMES SPANISH REQUEST FOR FINANCIAL ASSISTANCE.

[DCon]

Spain are still pretending the money will go directly to the banks while Germany have always insisted that funding will go to the Sovereign

My money is on Germany

the pretence will have to end now



Spanish government to remain fully liable for any funds distributed to it from euro zone rescue facilities
Will get funds from EFSF until ESM is active
Spain expected to require between EUR 51 and EUR 62 in assistance (initial talk was of EUR 100 bln)
IMF to surprise, provide technical advice


http://www.forexlive.com/blog/2012/06/27/eurogroup-spains-on-the-hook-for-bank-bailout/

[DCon]

Spanish Bond Yields back at 7%

http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2012/06/GSPG%20June%2028.jpg


What goes down, must shoot right back up. In this case we are talking about Spanish bond yields of course, which have yoyoed from a record 7.3% two weeks ago, back down to 6.3% last week, and right back up over 7% as of this morning. While the hope last week was that since the ECB is expanding its collateral it means an LTRO3 is on the way, the market promptly realized (even before LTRO3 was launched), that such a step means that Europe has run out of actual assets, and at this point is merely diluting the taxpayer collateral base. The result is that Spain is right back in purgatory where talk is cheap and unless Europe comes up with something concrete, purgatory will promptly be upgraded to the 8th circle of hell.

http://www.zerohedge.com/news/spain-back-over-7

[PaddyJoe]

So no direct funding for Spanish banks this year, according to an interview given to El País by German Finance Minister Wolfgang Schauble. A lot could happen in the next six months;)

[PaddyJoe]

No rush anytime soon on whatever that agreement was that Monti and Rajoy and Hollande forced through a couple of weeks back:)

AFP - The eurozone is unlikely to set up its planned banking supervisory body this year as hoped, German Finance Minister Wolfgang Schaeuble said in comments published Sunday.
His comments in an interview with Spanish newspaper El Pais raised pressure on Spain, which is waiting to finalise loans from its eurozone partners to secure its troubled banking sector
http://www.france24.com/en/20120708-europe-bank-supervisor-unlikely-year-german-minister?utm_source=dlvr.it&utm_medium=twitter

[Ephilant]

http://1.standaardcdn.be/Assets/Images_Upload/2012/07/07/rajoy.jpg.h380.jpg.568.jpg

What is hitting that fan?

Without expanding on it (so far), Mariano Ragoy announced that Spain will take "urgent and important new measures" to "ensure financial stability" in the country. Some of these measures will be taken immediately, others in the near future.

[Ephilant]

You do wonder what planet these people live on, or is it us on a different planet and not knowing about it?


The [Spanish] government intends to offer Spanish tax evaders more flexibility in its amnesty program after a group of lawyers and financial consultants representing the nation's wealthy families complained that the original terms were not sufficiently generous, according to a document prepared by the Treasury.
full article (http://elpais.com/elpais/2012/07/04/inenglish/1341401052_238134.html)

[DCon]

You do wonder what planet these people live on, or is it us on a different planet and not knowing about it?


full article (http://elpais.com/elpais/2012/07/04/inenglish/1341401052_238134.html)

Just like most other Nations, the Wealthiest Families have too much influence on the alleged governments

[DCon]

Spanish Bond Yields back at 7%

http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2012/06/GSPG%20June%2028.jpg



http://www.zerohedge.com/news/spain-back-over-7


7.07% this AM

[DCon]

Poor Spain is getting a bad bank. Not known if it will be a NAMA or just one existing bank designated the $hitheap


Spanish govt source: Memorandum of understanding with EU for Spanish bank rescue to be signed on Monday



Conditons will include a single ‘bad’ bank and 9% core capital ration for entire banking sector
Terms of banking aid to be signed on July20 and may include 15yr loans at 3-4%


http://www.forexlive.com/blog/2012/07/09/spanish-govt-source-memorandum-of-understanding-with-eu-for-spanish-bank-rescue-to-be-signed-on-monday/

[DCon]

Spanish reforms



VAT to rise to 21% from 18%
Increase in environment tax
Payment for new jobless cut to 50% of salary from 6 months
May revise installments on company tax
Tariff deficit to be eliminated
Power debt to be split between consumers, companies
New tax system to be used to eliminate tariff debt
To scrap rebate for homebuyers in 2013
Budget measures worth 65 bln euros over 2 years


http://www.forexlive.com/blog/2012/07/11/rajoy-spain-increases-vat/

[ang]

Police fire rubber bullets, clash with miners protesting in Madrid -

http://www.rt.com/news/spanish-madrid-coal-workers-918/

[Count Bobulescu]

Spain will be forced to give up most of its control over its banks. “Spain will be forced to give up most of the control over its banks to European institutions–and will be required to impose losses on local investors–in return for a bailout of as much as EUR100 billion ($123 billion), according to the draft agreement accompanying the rescue…Banks won’t get taxpayer funds until they have come up with a burden-sharing arrangement with investors. According to the draft document, those investors include not only equity holders, but also owners of hybrid capital and subordinated debt. The idea behind this exercise, for which Spain still has to create a legal basis, is to limit the amount of taxpayer-funded bailout money that has to be pumped into the banks. But in the case of Spain, such arrangements may still hit ordinary citizens directly, as hundreds of thousands of them bought preferred shares in local banks.” Matina Stevis and Gabrielle Steinhauser in The Wall Street Journal.

[PaddyJoe]

Loads of spontaneous protests today in the major cities as public servants including off duty police and firemen blockaded streets to demonstrate against the pay cuts announced yesterday.
Meanwhile local governments in Andalucia, The Canaries, Catalonia and Austurias have voted against the new lower limits on local government deficits imposed by Madrid.
This is going to end very badly.

[C. Flower]

Loads of spontaneous protests today in the major cities as public servants including off duty police and firemen blockaded streets to demonstrate against the pay cuts announced yesterday.
Meanwhile local governments in Andalucia, The Canaries, Catalonia and Austurias have voted against the new lower limits on local government deficits imposed by Madrid.
This is going to end very badly.

There simply has to be an alternative solution. All these protests will go nowhere unless we offer another way of solving this.

[morticia]

The only solution involves printing money and or debt forgiveness. The Germans won't wear it. Immovable object meets irresistible force. It will be interesting to see how this one ends. But protesting in non German locations will have very little effect. People need to protest in a way that hits home in Europe North-Central. Boycotts of goods, movements of protesters to Berlin, Frankfurt, the Hague and Helsinki???

[Ephilant]

Rajoy wields the ax, and does it well. Probably will get a serious pat on the head from Merkel and Co. Meanwhile, his party colleague Andrea Fabra landed herself in hot water, and deservedly so. After Rajoy announced the savage cuts, once again hitting the poorest in society, she was clearlt heard shouting about the measures inflicted on the unemployed:

que se jodan. It translates into something like "**** 'M ANYWAY"
Sometimes the elite does indeed drop the mask...

http://www.youtube.com/watch?feature=endscreen&NR=1&v=ddjQ12-zHF8

[C. Flower]

Rajoy wields the ax, and does it well. Probably will get a serious pat on the head from Merkel and Co. Meanwhile, his party colleague Andrea Fabra landed herself in hot water, and deservedly so. After Rajoy announce the savage cuts, once again hitting the poorest in society, she was clearlt heard shouting about the measures inflicted on the unemployed:
. It translates into something like "******* 'M ANYWAY"
Sometimes the elite does indeed drop the mask...

http://www.youtube.com/watch?feature=endscreen&NR=1&v=ddjQ12-zHF8

Good to have a bit of clarity brought into political discourse.

(Unless it was dubbed by @soundmigration...)

[MPB]

Anybody who thinks that the Spanish Govt did not enter into a reparations agreement with the Germans is a fool.

This emergency budget, is proof that Rajoy is not in control of the country that elected him.

What is he in control of?

Just like here, he is in control of how his friends and acolytes are supported and enriched.

Our only hope is for collapse.

In my opinion, they cannot afford to prevent it.

Banks, nothing else, only Banks.

I am willing to bet that, there is not a Bank in Europe that is solvent.

[PaddyJoe]

Rajoy wields the ax, and does it well. Probably will get a serious pat on the head from Merkel and Co. Meanwhile, his party colleague Andrea Fabra landed herself in hot water, and deservedly so. After Rajoy announced the savage cuts, once again hitting the poorest in society, she was clearlt heard shouting about the measures inflicted on the unemployed:
. It translates into something like "**** 'M ANYWAY"
Sometimes the elite does indeed drop the mask...

http://www.youtube.com/watch?feature=endscreen&NR=1&v=ddjQ12-zHF8

At least the Spanish right wing can't be accused of hiding behind platitudes. There's a huge section of the PP that's indistinguishable from its predecessors under the dictatorship in the seventies:

A video shows Ana Fabra, daughter of Castellon's regional council president Carlos Fabra, clapping and yelling "**** them all" as Mariano Rajoy announced cuts in unemployment benefits.

Spain's main opposition party PSOE has asked the PP deputy to give up her seat. "Andrea Fabra must leave her seat. She is not worthy of representing the citizens. She shouted '**** them all' when Rajoy announced the cuts to the unemployed, “the Socialists claimed on their Twitter account.
Fabra has admitted having pronounced those words but claims she was referring to the PSOE members of parliament, who were interrupting Rajoy's speech with jeers and boos.
http://www.eitb.com/en/news/politics/detail/923753/ana-fabra-****-them-all--ana-fabra-yells-unemployed-****-them/

[PaddyJoe]

At least the Spanish right wing can't be accused of hiding behind platitudes. There's a huge section of the PP that's indistinguishable from its predecessors under the dictatorship in the seventies:


http://www.eitb.com/en/news/politics/detail/923753/ana-fabra-****-them-all--ana-fabra-yells-unemployed-****-them/

A song called 'Que se joda Andrea Fabra'(**** Andrea Fabra) is getting thousands of hits on youtube:D
http://www.youtube.com/watch?feature=player_embedded&v=BXyxhdFwLmY

[PaddyJoe]

Andrea Fabra has been forced to apologise for her '**** them' remarks and is scolded officially by the House Speaker during today's session.
Meanwhile, streets in central Madrid have been cut off again today by public sector demonstrations including one of the police unions.
The Royal Family are to take a cut of 7% in their state allowances while it has been announced that public servants earning less that 962 euro per month will not have the cuts applied.
:rolleyes:

[PaddyJoe]

Protests in 80 Spanish cities tonight against cuts. Looks like the biggest crowds since the #15M last year. For once both El Pais and El Mundo lead with the same story:
http://elpais.es
http://www.elmundo.es

[ang]

SPAIN NEARS IMPLOSION: Finance Minister Proposes Huge Tax, Businesses Threaten To Leave -


Cristobal Montoro, the Spain's finance minister has made a liquidity destroying proposal to tax short-term financial transactions at an astonishing 56% tax rate. Businesses are already upset over hikes in the VAT and have threatened to leave Spain.


http://www.businessinsider.com/spain-nears-implosion-finance-minister-proposes-huge-tax-businesses-threaten-to-leave-2012-7

[ang]

German & Spanish Finance Ministers to Meet as Their Economies Diverge -


The finance ministers of Spain and Germany will meet for crisis talks in Berlin Tuesday, but while the ministers come together, their economic performance is diverging ever more sharply.

Two separate reports published Monday by the countries' respective central banks showed the two economies headed in drastically different directions, with Spain's saying that output had contracted 0.4% in the second quarter. Having already fallen by 0.3% in the first three months of the year, Spain is now officially in recession. The Bank of Spain expects the economy to shrink by 1.5% this year.

http://online.wsj.com/article/SB10000872396390443437504577544971410850152.html?m od=europe_home

[ang]

Update on Spanish/German meeting tomorrow -


Germany's finance minister, Wolfgang Schäuble, will meet his Spanish counterpart, Luis de Guindos, for crisis talks on Tuesday amid fears that spiralling bond yields in the eurozone's fourth biggest economy will force it to seek a €300bn bailout from the European Union and the International Monetary Fund.

http://www.guardian.co.uk/business/2012/jul/23/spain-crisis-talks-germany-bailout-eurozone

[MPB]

Update on Spanish/German meeting tomorrow -



http://www.guardian.co.uk/business/2012/jul/23/spain-crisis-talks-germany-bailout-eurozone

A lot of very rich people are going to be very poor at the end of all of this.

Despite the attempts by their political and Banking servants, to have ordinary people pay their bills.