Is the EC pushing Spain towards a bailout?

[C. Flower]

http://www.cnbc.com/id/48891162

A deathly hush on this, and on the continuing payouts by Ireland.

It is an Alice through the Looking Glass world.

[Dr. FIVE]

Yip, only beginning to surface now before the politicians return

[DCon]

Spain has started using the ELA. I wonder if a letter from the ECB President is on the way yet?

The WSJ disconcertingly highlights that last month the central bank appears for the first time to have activated an emergency lending program that will enable its banks to borrow from the Bank of Spain directly, bypassing the ECB's relatively tough collateral demands.

The so-called Emergency Liquidity Assistance program is shrouded in secrecy, and the Bank of Spain won't confirm that it has been used. The Bank of Spain appears to have doled out about EUR400mm under the program, based on publicly available data. That would make Spain at least the fourth euro-zone country - following Greece, Ireland and Portugal - to use the ELA, which generally is reserved for situations when banks have exhausted all other financing options.

As we pointed out yesterday, this would appear to confirm a "full-blown bailout" is imminent, as the collateral problems mount.

http://www.zerohedge.com/news/spain-...arts-using-ela

[C. Flower]

Spain has started using the ELA. I wonder if a letter from the ECB President is on the way yet?

http://www.zerohedge.com/news/spain-...arts-using-ela

Spain must know that the ELA is like the ELAstic going in yr knickers. It is only a matter of time before you find yourself bare-assed, at the command of the Troika.

[PaddyJoe]

Spain must know that the ELA is like the ELAstic going in yr knickers. It is only a matter of time before you find yourself bare-assed, at the command of the Troika.

[DCon]

Spain preparing to fold

Market News story: Spain prepared to make an official request for aid in early October

As long as conditions do not go substantially beyond what Spanish government has already committed to.

http://www.forexlive.com/blog/2012/0...early-october/

[DCon]

Rajoy is meeting with Merkel today. Spain will not request a bailout without prior approval from Germany, in case Germany blocks the bailout

Merkel favours additional austerity measures in Spain and Rajoy does not want any more

May we live in interesting times

[Dr. FIVE]

Golem has some good stuff at the moment

http://www.golemxiv.co.uk/

[DCon]

Not long now, if the FT is to be believed

EU authorities are working behind the scenes to pave the way for a new Spanish rescue programme and unlimited bond buying by the European Central Bank, by helping Madrid craft an economic reform programme that will be unveiled next week.

According to officials involved in the discussions, talks between the Spanish government and the European Commission are focusing on measures that would be demanded by international lenders as part of a new rescue programme, ensuring they are in place before a bailout is formally requested.

Pressure is expected to increase again next Friday, when the Spanish government is due to announce results of a three-month review of its financial system. The review includes how much ESM money will be needed to recapitalise the Spanish savings banks, or cajas, which were particularly hard hit by a burst housing bubble. The EU has already pledged as much as €100bn to help recapitalise the country’s teetering banks.

In the latest sign Spain is still trying to avoid a formal request for more aid, Spanish officials this week began discussing whether they could use some of the bank rescue funds to buy Spanish sovereign debt – essentially getting bailout money through the back door.

Simon O’Connor, the European Commission’s economic spokesman, said Spain would not be allowed to redirect the aid money, while another senior eurozone official said Madrid was “freelancing”.

However, the official said Madrid’s request could not be completely dismissed. Using cash leftover from the bank bailout to buy sovereign debt would not require approval from the legislatures of Spain’s European partners – something of particular concern in Berlin, where the government has urged Madrid not to request further aid so it can avoid a confrontation with a reluctant Bundestag.

http://www.ft.com/intl/cms/s/0/11f76...#axzz272YIIOqF

[DCon]

Spanish starting reforms are out

Spain is considering freezing pensions and speeding up a planned rise in the retirement age as it races to cut spending and meet conditions of an expected international sovereign aid package, sources with knowledge of the matter said.

The measures would save at least 4 billion euros a year as well as fulfil European Union policy recommendations issued in May which senior euro zone sources said were being used as a blueprint for the terms of a sovereign aid programme.

The accelerated raising of the retirement age to 67 from 65, currently scheduled to take place over 15 years, is a done deal, the sources said. The elimination of an inflation-linked annual pension hike is still being considered.

http://in.reuters.com/article/2012/0...88K08420120921

[PaddyJoe]

Protests this evening as anti austerity demonstrators try to surround the Madrid Parliament
http://politica.elpais.com/politica/...325_1348590867

[PaddyJoe]

Huge crowds in the streets around Parliament at the moment. Good live stream from rtve.es here:
http://www.rtve.es/noticias/directo2/

[C. Flower]

Huge crowds in the streets around Parliament at the moment. Good live stream from rtve.es here:
http://www.rtve.es/noticias/directo2/

Impressive.

RTE is reporting a collapse in the price of coffee in the markets, as people aren't drinking it in Italy and Spain.

If that isn't the limit to austerity, I don't know what is.

[Dr. FIVE]

[C. Flower]

Bit protest.

The usual plain clothes police provocateurs. This time in white hoodies, just for a change.

Should they not be put under citizens' arrest ?

[ame="http://www.youtube.com/watch?v=FYGnbG9QcCY"]Infiltrados de la policia iniciaron la carga de #OcupaElcongreso Min 3:00 - YouTube[/ame]