Eurozone finance ministers on Saturday (9 June) agreed to disburse up to €100bn for Spain's troubled banks, but without an accompanying austerity programme as for Greece, Ireland and Portugal.The prospect of Greece cancelling its second bail-out and possibly exiting the eurozone drove Spain's borrowing costs into bail-out territory and led to a downgrade by Fitch ratings agency.Two other independent audits are expected later this month, after which the final sum will be revealed. Unclear is also which bail-out fund will be used - the temporary European Financial Stability Facility or the upcoming European Stability Mechanism, due to come into force early July.
A Spanish bank bail-out - potentially - and Greek elections are the big events on the EU calendar next week.Reuters and the Financial Times on Friday (8 June) reported that eurozone finance ministers are to hold a special teleconfrence on Saturday at which Spain will formally request help for its banks.If it happens, it will be the fourth bail-out since the crisis began.For its part, the IMF will in a report on Monday say how much money Spanish banks need.
The window of opportunity for Spain is closing.The budgetary discipline bill applies to eurozone countries only and represents a quantum leap in European Commission power.
Spain became the fourth and largest country Saturday to ask Europe to rescue its failing banks, a bailout of up to (EURO)100 billion ($125 billion) that leaders hoped would stabilize a financial crisis that threatens to break apart the 17-country eurozone.The rescue offer follows growing pressure from international investors and the Obama administration and comes a week before elections in Greece, whose voters could decide whether the country leaves the euro.Europe's widening recession and financial crisis has hurt companies and investors around the world. Providing a financial lifeline to Spanish banks is likely to relieve anxiety on the Spanish economy - which is five times larger than Greece's - and on markets concerned about the country's ability to pay its way."What the markets are looking for is essentially the Spanish government's acceptance that its banks are broke," said Jacob Kirkegaard, a research fellow at the Peterson Institute for International Economics in Washington.International pressure on Spain to solve its financial problems has grown more urgent in recent weeks. On Thursday ratings agency Fitch hit Spain with a three-notch downgrade of its credit rating. That left it two levels above junk status. Then on Friday, Moody's Investor Services warned it could downgrade Spain and other countries in the eurozone.
After two years of denials, we finally have the right answer: Spain IS Greece. Only much bigger (it is also the US, although while the US TARP was $700 billion or 5% of then GDP, the just announced Spanish tarp is 10% of Spanish GDP, so technically Spain is 2x the US). So now that the European bailout has moved from Greece, Ireland and Portugal on to the big one, Spain, here are the key outstanding questions.
Which brings us to a bigger question: now that Spain is officially to be bailed out, what happens next. And by that we mean of course the big one: Italy. Recall that as we posted in Brussels… We Have A Problem, once the contagion spreads again to Italy, and that country also needs a bailout, it is game over. From the world’s biggest hedge fund Bridgewater:Naturally with Spain now officially biting the bullet, the only question remaining is: when is Italy going to drop next.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.
Well that didn't take long. The ink on the #Spailout is not dry yet (well technically there is no ink, because none of the actual details of the Spanish banking system rescue are even remotely known, and likely won't be because when it comes to answering where themoney comes from there simply is no answer) and we already have an answer to one of our questions."Ireland wants to renegotiate its rescue plan to benefit from the same treatment as Spain, which looks set to win a bailout for its banks without any broader economic reforms in return, European sources said on Saturday."And with Ireland on the renegotiation train, next comes Greece. Only with Greece the wheels for a bailout overhaul are already in motionCongrats Germany: you have now opened the Pandora's box of infinite moral hazard, bailout renegotiations and unconditional rescues.
Did you catch that? Spain scored itself a massive no-strings-attached bailout deal. Clearly, this sets them apart from the other eurozone countries that were forced to agree to austerity measures in order to be eligible for financial aid.“Ireland wants to renegotiate its rescue plan to benefit from the same treatment as Spain, which looks set to win a bailout for its banks without any broader economic reforms in return,” the AFPreports.
You know what this means, right? Ireland isn’t going to be the only bailed out country crying foul.
You know who else is going to be unhappy about this?“[W]ith Ireland on the renegotiation train, next comes Greece. Only with Greece the wheels for a bailout overhaul are already in motionIndeed, if you thought the situation in the EU was dire, consider a scenario where previously rescued countries decide to renege on the terms of their bailouts.
Euro zone finance ministers agreed on Saturday to lend Spain up to 100 billion euros ($125 billion) to shore up its teetering banks and Madrid said it would specify precisely how much it needs once independent audits report in just over a week.After a 2-1/2-hour conference call of the 17 finance ministers, which several sources described as heated, the Eurogroup and Madrid said the amount of the bailout would be sufficiently large to banish any doubts.
Such moments of destiny now test us in our turn. Two short weeks ago, across Everests of whipped cream and dense cappuccino fog, our iPads blipped something or other about the Greek Neo-Nazi party winning seven percent in elections held amid Weimar-like disintegration of that country’s economy. A hundred million eyes rolled, five million deigned to snort, and all buried their minds, ostrich-like, in caffeinated indifference.The once-obscure Greek Golden Dawn is worthy of more than snorting disdain. Its growth and the conditions in Greece are reminiscent of pre-War Germany.The organization owes its advent in part to a band of new Eckarts, men who use religion to mask their antisemitic ideology and socialist economic theory in Europe and the United States. The organization’s growing popularity demonstrates how quickly small numbers and risible doctrines can achieve power given favorable social factors.The real Europe, to rise again, will need a single political center that embodies a compelling Idea. This will only happen with a state entity, by its nature “superior” to individual people and offering them a great historic mission: that of “order” making the world a mirror of the Order of heaven. The Idea is the rediscovery of the imperial (not imperialist!) (It is the Idea) of a power “consecrated” from on High and rooted in many people- related, similar and united — but still distinct and vital. It will be one hundred flags of the European Empire.
The ENF embraces an economic policy that opposes the “effects of Zionism.” It advocates distributism, a social philosophy erroneously claiming to be based on that of Popes Leo XIII and Pius XI, who outlined solutions for the ill effects of the Industrial Revolution and the rise of Communism.Radical distributists wax eloquent concerning the role of “Zionist international banking empires” in the present state of Europe, but are shy when asked for details concerning the distribution of presently-held “Zionist” wealth. The implementation of distributism requires stringent state involvement.We have five million unemployed people and people have a lot to do to look for jobs and they are worrying about their future. Especially in the time if you have economical problems, then the young people are easy to influence, to seduce. If one politician tells to the people, “The Turkish guys, or the foreign guys, or the Jewish guys are responsible, then you believe it and you vote for the Nazis.”
I think we are on the last leg of the run up to the Rapture. Everything is unfolding rapidly. This is where the change in world currencies take place into a one world-wide economic system. Once the Euro collapses, it will ripple through out the rest of the world.
With the Mid-East on the brink of war with Iran, Syria, Russia, China, Israel, and the US, we know what the Word says about Is 17, Psalm 83, and Ezekiel 38 & 39. I was wondering about some of the smaller details like how involved will the US be with whats going on in Syria? Will we go into Syria without UN approval? Is Obama using what's happening in the Middle East to further his agenda here in America? Possibly!
I came across this today and its really troubling to see where we are heading as a nation. Please read this one:
The planned re-election of Obama, revolutionary style
Reading this one makes me want to buy a few extra bags of groceries this weekend. Not to cause panic and worry to my brothers and sisters as that is of the evil one, but we need to be prayful and carefully plan as we are lead by the Spirit of God. Praying for all here as we face the days and months ahead, as we clearly see as if we just "found our glasses", the perfect vision in sight of our Redeption! Look up folks!
Just sitting here shaking my head in utter disbelief....
Has the Lord given us this much discernment?
Most of the world this amount of blindness?
And this singular focus...look here no ...look there....whoops...there's no strings to tie the subject of this week together with last week's subjects.
We know Israel and the whole ME is gonna blow. We know Iran is gonna try, and probably be successful, in shutting the oil flow down, we know the economies that are teetering on the edge are going over the cliff, we know the FE_MA camps are out there, we know we...yes us...have been labeled domestic terr_orist, we know the volcanoes have been cycling, and a whole litany of other "stuff" like weird weather and massive wildlife kills.
My imagination just almost shuts down when I even try to contemplate how bad it "could" be and how many scenarios that could play out.
Whieeee Doggie....as Jed Clampett used to say. It are gonna be a humdinger.
Jec…You speak wisdom, and what you suggest is not alarmist at all. We are assured that God will remove his church before the tribulation but that is definitely NOT an assurance that things could not become a little difficult before then. It is not a lack of faith to prepare for events, to whatever degree you feel comfortable, while God has made supplies readily available. In fact the Bible admonishes us to be wise, store and prepare.
In the house of the wise are stores of choice food and oil, but a foolish man devours all he has.
Prov 21:20 NIV
The prudent see danger and take refuge, but the simple keep going and suffer for it.
Prov 27:12 NIV
We have left a letter and a bible with our food stores. It simply states that if you have inherited this home and food then we are now with our Lord and you are in possession of this because God put it on our heart to do this. We have prayed for you and we hope to meet you soon.
R.G....You put it so simply and beautiful. Couldnt agree with you more.
R.G. - I completely agree. Plan for the worse and hope for the best.
Caver - I think its both. We do have discernment and the world really is that blind IMO.
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