Spain admits the need for a Rescue of 300 billion

By LUIS MIRANDA | THE REAL AGENDA | JULY 30, 2012

The Spanish Minister of Economy and Competitiveness, Luis de Guindos announced last week to its German counterpart that Spain will most likely need an extra 300 billion Euros in what will constitute the most feared but long time coming financial rescue of the Spanish economy. Mr. Guindos explained that the new bailout will be added to the 100 billion approved for the banks just a few weeks ago, when Spanish Prime Minister, Mariano Rajoy denied that Spain would need any further aid in order to keep its economy above water. At that time, Rajoy also denied that Spain was in a critical situation and that the country had one of the strongest economies of the euro region.

Even after Mr. Guindos announced that he had held talks with his German counterpart, Mariano Rajoy denied that Spain had even mentioned such a thing during the talks. Apparently, Germany’s Wolfgang Schaeuble said that his country would not consider a financial rescue until the European Stability Mechanism wasn’t fully in place. Spain’s request for rescue comes at a time when the country is finding it too difficult to keep up with its funding costs, which become increasingly unsustainable.

The Minister of Economy and Competitiveness discussed this possibility in his meeting in Berlin with his German counterpart, Wolfgang Schaeuble, last Tuesday, when the interest of ten-year Spanish bond exceeded 7.6%. According to the source, if this money is needed, it is because it is necessary to strengthen the Spanish economy as a whole while the banking sector is also made more solvent, say Spanish government officials.

“Guindos spoke about 300,000 million in aid, but Germany was not comfortable with the idea of ​​a bailout now,” said a Spanish source. “Once you see what are the operating costs of borrowing for Spain, perhaps we will return to this issue,” he added. Asked about this information, a Spanish government spokesman denied “categorically” any such plan. “The possibility of a rescue of 300,000 million euros for Spain has not been provided and has not been discussed,” he added.

Meanwhile, a second official source of the euro zone, said that Spain could avoid the rescue, but added that there have been miscommunications that have worried investors. “In pure arithmetic terms, if interest rates are consistent with what I consider a sustainable situation we won’t need it,” he said when asked if Spain needs the full rescue.

Commission approves 18 billion in aid for four Greek banks

The European Commission approved on Friday approved a temporary assistance of 18 billion euros to recapitalize four Greek banks. They are Alpha Bank, EFG Eurobank, Piraeus Bank and National Bank. The four banks in question account for about three quarters of the Greek banking sector and the news rescue is given  in order to ensure financial stability, said the official communique.

In parallel, the EU executive has opened a detailed investigation on this injection of capital to determine whether it conforms to EU rules on aid banks. “The participation of these banks in the exchange of Greek government bonds (which imposed substantial losses) and the deep recession has weakened their capital.

The recapitalization fund bridge across the Hellenic financial stability ensures the stability of the Greek banking system” has said Vice President of the Commission responsible for Competition, Joaquin Almunia in a statement.

The four banks now play an important role in financing the real economy, as highlighted by Brussels. “The opening of a thorough investigation is common for large amounts of public support through atypical instruments” and “we do not prejudge the outcome of the investigation,” said the Commission.
In addition, the EU executive has authorized a temporary aid of 1,700 million euros for the liquidation of Proton Bank and its transformation into a new entity, Nea Proton Bank. Also in this case, the EU has opened a detailed investigation on doubts about the viability of the bank’s long-term existence without subsidies and whether this is the least costly way to address its problems.

About Editor
The Real Agenda is an independent publication. It does not take money from Corporations, Foundations or Non-Governmental Organizations. It provides news reports in three languages: English, Spanish and Portuguese to reach a larger group of readers. Our news are not guided by any ideological, political or religious interest, which allows us to keep our integrity towards the readers.

Comments are closed.

Related Links:

Togel178

Pedetogel

Sabatoto

Togel279

Togel158

Colok178

Novaslot88

Lain-Lain

Partner Links