This can’t be good. Most certainly not for them. Even liberal lame stream media is puckering over it.
This will undoubtedly affect us here sometime pretty soon.
Spain’s economic fortunes have gone from boom to deep financial crisis over the past decade. Here are the main developments:
MADRID (AP) — Spain’s economic fortunes have gone from boom to deep financial crisis over the past decade. Here are the main developments:
BIRTH OF THE EURO —Spain is one of 12 countries that joined the single European currency in 1999. Following the euro’s launch in 2002, the euro is now shared by 17 countries. Spain’s membership in this powerful bloc gave it access to lower interest rate loans than it would have got on its own.
I don’t see anything to stop this from snowballing out of control. There will be more printing of money as people get desperate.
All the dominoes are in jeopardy.
German Opposition Threatens To Scuttle ESM, And Spanish Bailout, Ratification
Gradually, the key open items from yesterday’s Spanish bailout are getting some closure. First, we learned that Ireland, as speculated, will demand a comparable retroactive bailout renegotiation, an act which also puts the Greek elections a week from today in play. Then, we got definitive confirmation that the Spanish loan, coming at ~3% or half Spanish GGBs, is a priming loan,subordinating existing creditors. Finally, we learn that the ESM – the bailout mechanism at the heart of all current and future European bailout plans, and which still has not been ratified by Germany, is in danger of being scuttled by none other than the German opposition. The reason? According to aReuters report, “A [Spiegel] report that German Chancellor Angela Merkel is not serious about implementing a European financial transaction tax threatens to undermine an initial deal struck last week with the opposition over the EU’s planned fiscal pact… The Social Democrats (SPD) and Greens are insisting on a plan for a transaction tax and measures to boost growth.”
It now appears, Merkel has been posturing on the issue which the opposition holds quite dear. However, she needs the opposition on her side to pass not only the fiscal pact but the ESM ratification, without which the entire Spanish bailout collapses: “She wants to push the pact through parliament in the next few weeks together with a bill on the new European Stability Mechanism (ESM) bailout fund which Spain may use, but needs the opposition to get the required two thirds majority.” All this ignores what Die Welt reported earlier today, that “Spanish banks should come under special supervision” according to Volker Kauder, parliamentary leader of Merkel’s CDU, something which the Spain public would violently oppose. In other words: hold off on popping the Spanish bailout champagne…
Continuing with Reuters:
It would be a major embarrassment if Germany, which as euro zone paymaster dictates much of its crisis response, missed its deadline for ratification on July 1 when the ESM is due to take effect.
Finance Minister Wolfgang Schaeuble tried to pressure the SPD and Greens.
“It would be completely irresponsible not to ratify the fiscal treaty,” said Schaueble on ARD television, adding he doubted a European financial transaction tax would be introduced in this legislative term which runs until next year’s elections.
He said on Saturday that Spain’s decision to request aid made it even more important to quickly ratify the fiscal pact and ESM. Its greater flexibility makes the ESM preferable to the European Financial Stability Facility (EFSF) to use for Spain.