Spain is getting a bailout

worldtraveller

Economic experts watching Spain don't know how much money will be needed or precisely when, but some are near certain that Madrid will eventually seek a multi-billion euro bailout for its banks, and perhaps even for the state itself.

Prime Minister Mariano Rajoy has repeatedly said Spain doesn't need or want an international bailout, and the European Union, which along with the IMF has already rescued Greece, Ireland and Portugal, also dismisses such talk.

Reuters

Now, where have I heard that before? :think: :idea: :rotfl:

Mrs_Bones

Prime Minister Mariano Rajoy has repeatedly said Spain doesn't need or want an international bailout.

The kiss of death for the economy of any country in the Eurozone. It's on par with our Prime Minster stating they have full confidence and trust in a minister after they have hit the media headlines over some scandal or other.

The_White_Horse

worldtraveller wrote: »

I was reading recently that around 40-50% of Spain's local governments are in serious economic trouble and many of the public sector workers haven't been paid for 2-3 months (White Horse will love that! )

it is probably their overinflated huge salaries and pensions over the last decade that has caused most of the problem.

chickens roost home etc spring to mind.

worldtraveller

Let's be honest here, it's pretty hard to imagine, IMHO, that Spain will not, eventually, need a bailout, whether it's the banks, and/or the state. Maybe not now, or next month, but maybe in 6-12 months time. With unemployment at around 25%, and the current austerity measures, there is likely to be a further decline in GDP. The bad loans sheet is looking very bad indeed and has been mentioned by myself and others, for some considerable time now.

Having said that, the markets are now looking even beyond Spain, at the likes of Italy, which has a GDP around 50% greater than Spain and, should that country require a bailout, you can pretty much say goodbye to the Euro. That, or maybe, a crippling raid on worldwide taxpayers, through the likes of the IMF, to protect the "grand experiment". Be worried people, be very worried! :eek:

worldtraveller

Spain's sickly economy faces a "crisis of huge proportions", a minister said on Friday, as unemployment hit its highest level in two decades and Standard and Poor's weighed in with a two-notch downgrade of the government's debt.

Spain's unemployment rate shot up to 24 percent in the first quarter, the highest level since the early 1990s and one of the worst jobless figures in the world. Retail sales slumped for the twenty-first consecutive month.

"The figures are terrible for everyone and terrible for the government ... Spain is in a crisis of huge proportions," Foreign Minister Jose Manuel Garcia-Margallo said in a radio interview.

Reuters

It's strange to hear a politician actually saying it like it is for a change! No doubt he'll be the first up against the wall when a EU technocrat is probably put in place before very long. :whistle:

BTW, Italian bond yields rose sharply this morning - 10 year at 5.84%, up from 5.24% last month.

michaels

Is Santander UK ringfenced? I seem to remember Lehman UK saw a very dogdy transfer of many billions back to the US hours before the plug was pulled.

Conrad

An economist on Radio 4 described how a car manufacturer had to flee Spain a while back as they simply couldn't justify the low return on capital which was specifically down to employee benefits such as very generous rights to sick pay and all manner of bizzare regulations designed to featherbed the workers. In the end the world has no desire whatsoever to fund these gready lavish social constructs.

Europe is nowhere near where it needs to be in terms of de - regulation. The Germans have been banging on about this and they are incredibly frustrated with the social entitlement mindset still very much alive in Euroland. This drives away capaital.

Still Europe is pouring out regulations instead of focusing on growth growth growth. Who are these out of touch Euro politicians choosing to spend thier time regulating rather than fighting tooth and nail to make Europe the place to do business?

Will we ever learn the world doesn't want to fund our lavish social contract?

Thrugelmir

michaels wrote: »

Is Santander UK ringfenced?

Banks don't operate in isolation that's the real problem. The problems in Spain will merely result in Santander UK lending less. As capital is repatriated home.

worldtraveller

European stock markets tumbled and Spain's borrowing costs have shot up as the country's wealthiest autonomous region, Catalonia, calls for a bailout from central government to pay the bills.

Catalonia, which represents one fifth of the Spanish economy, has more than €13bn in debt to refinance this year, as well as its deficit. All of the regions together have €36bn to refinance this year, as well as an authorised deficit of €15bn.

The debt burden of Spain's 17 highly devolved regions and toxic property debt held by the country's banks are at the heart of the eurozone debt crisis because investors fear they could strain finances to the point that an international bailout is needed.

Telegraph.co.uk

purch

Thrugelmir wrote: »

Spain has never been a wealthy country.The credit boom has distorted reality in Western Europe.

As has the EUR.

Countries such as Spain, Portugal, Italy and Greece cannot operate with a strong currency.

They need to export (and incoming tourism is their major export) and a strong currency is the last thing they needed.

A strong currency and cheap credit has destroyed the already weak economies of these nations.