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Wolf Richter www.testosteronepit.com www.amazon.com/author/wolfrichter It should have been a glorious event for Spanish Prime Minister Mariano Rajoy: a tête-à-tête with German Chancellor Angela Merkel. At the press conference following the 24th German-Spanish government consultation, he’d stand next to her, illuminated by her glory. He’d brag about implementing structural reforms, cleaning up the bailed-out banking sector, and moving Spain forward. He’d point at yields on government debt trending down toward normalcy. No, Spain wouldn’t [...] by Michael Are we witnessing the start of a historic financial meltdown in Europe? In recent days, two massive corruption scandals have greatly shaken confidence in European financial markets. The first involves Spanish Prime Minister Mariano Rajoy. It is being alleged that he has been receiving illegal cash payments, and the calls for his resignation grow louder with each passing day. The second is a derivatives scandal at the third largest bank [...] globaleconomicanalysis.blogspot.com / By Mike “Mish” Shedlock / December 27, 2012 1:39 PM Looking for a synopsis of the problems facing Spain? A summary of bullet points I gathered from the Spiegel article Evictions Become Focus of Spanish Crisis shows just how hopeless the situation is. There were a record number of evictions in 2012, foreclosures are expected to increase in 2013. by Phoenix Capital Research
Spain continues to heap one impossible idea on top of another. The latest “plan” consists of Spain creating a bad bank called SAREB that will buy up bad assets in Spain in an effort to clean up the country’s finances. SAREB was part of the €100 billion Spanish bailout plan which was set forth in June. Once again, none of it makes any sense. Spain’s Bad Bank to Buy Up [...] by Phoenix Capital Research As I noted previous articles, Spain has essentially three options: 1) Spain goes the “Greek route” of agreeing to austerity measures in exchange for bailouts (which will implode the economy). 2) Prime Minister Rajoy refuses to impose austerity measures and is removed/ replaced by an EU technocrat who is pro-austerity measures (like Italy experienced last year) 3) Spain defaults/ leaves the EU. Thus far Spanish Prime Minister Rajoy has opted to [...] Mario Draghi’s plan to save the euro is about to get a test run. Spanish Prime Minister Mariano Rajoy appears ready to accept—perhaps not immediately, but soon—the European Central Bank president’s offer of a deal, in which the bank would buy up Spanish government debt in exchange for promised austerity and economic reforms. Investors seem persuaded that a bailout is at hand: The returns they’re demanding on Spanish bonds have [...] From Bloomberg: Stocks rallied and commodities rebounded from a seven-week low as Spain pledged to cut its deficit and speculation grew that China’s government will do more to support economic growth. The dollar and Treasurys fell. The MSCI All-Country World Index (MXWD) climbed 1 percent at 2:42 p.m. in New York, rebounding from its biggest drop since July. The Standard & Poor’s 500 Index advanced 1.1 percent, halting a five-day slump, and [...]
Spanish Prime Minister calls for rapid introduction of euro bonds From spiegel.de: “We need to discuss now”: The Spanish Prime Minister Rajoy has called for a joint liability of the euro area – and a common fiscal policy later than the 2018th The current high interest rates are not sustainable for long. Berlin – The Spanish Prime Minister is putting pressure on the federal government.In the “Bild am Sonntag” suggests Mariano Rajoy before a three-step roadmap to [...] Pressure in the eurozone increased again yesterday as the Spanish government began talks over a bailout, leaders struggled to prevent Greece leaving the single currency and economic data indicated a return to recession. In a move that will renew fears of a collapse of the single currency, Spanish officials have discussed an aid package for its sovereign debts from the eurozone’s trillion euro rescue fund. The country has already received support to [...] From CNN: Spain has been in the line of fire since it requested up to €100 billion in loans from the eurozone rescue fund to recapitalize the nation’s banks. Eurozone finance ministers approved the terms of the loan agreementlast week, but the move failed to allay concerns about Spain needing a full-blown bailout similar to those given to Greece, Portugal and Ireland. Related: Europe threatens U.S. economy, says Geithner Spanish Prime Minister Mariano Rajoy has resisted [...] Wolf Richter www.testosteronepit.com After 21 summits to save the euro, followed by dog-and-pony shows to calm the markets, followed by confidence-inspiring pronouncements about insurmountable firewalls and pandemic structural reforms, the euro is in greater danger than ever before. After the last summit at the end of June, Spanish Prime Minister Mariano Rajoy walked away with a victory smile, and Italian Prime Minister Mario Monti was so triumphant that it aggravated other heads [...] Analysts warn recession-ravaged Spain is on the brink of financial disaster Italy heads towards bail-out with nearly £1trillion public debt More Spanish regional governments expected to call on central government for help, sparking fears Spain will need full bail-out From Bloomberg: Europe was plunged into fresh market turmoil as this week’s visit by Greece’s creditors rekindled concern the currency union will splinter and the first call for bailout aid by a Spanish region caused borrowing costs to surge. Anti-euro sentiment in Italy is already very strong and about to get stronger.
Eurointellihence has some interesting comments regarding Italy. “The demonstrations and protests [in Spain] are very likely now to spread to Italy. The country’s largest union, CGIL, said there would be a public-sector strike in September to oppose the Italian government latest austerity plan, Il Fatto Quotidiano reports. According to Susanna Camusso, CGIL head, its union will launch “a general strike of [...] Spanish Prime Minister Mariano Rajoy announced tax increases and spending cuts totaling 65 billion euros ($80 billion), risking a deepening recession to keep the euro financial crisis at bay. Rajoy’s fourth austerity package in seven months will raise the sales levy to 21 percent from 18 percent; scrap a tax rebate for home buyers; scale back unemployment benefits and study pension cuts; consolidate local governments and eliminate the year-end bonus for public workers. The budget [...] Wolf Richter www.testosteronepit.com Markets soared in Asia, Europe, the US, everywhere. Let the good times roll. The euro jumped to the highest level in a couple of weeks. Yields on Spanish bonds plunged to the lowest level since, well, Monday. A miracle had happened. German Chancellor Angela Merkel had blinked. Um, a little bit. All eyes were on her at the EU summit in Brussels, the one summit that would once and for all save [...] To the delight of investors and relief of her euro-zone counterparts, German Chancellor Angela Merkel made some key concessions at Friday’s EU summit. But the celebration is premature because she has still left herself plenty of room for maneuver. German Chancellor Angela Merkel rarely sees these kinds of negative headlines when returning from European Union summits. During her over six years as the head of Germany’s government, she has usually been [...] Not just in soccer, but in politics too. Merkel gets her ass handed to her on a silver platter. Angela Merkel took a tough stance ahead of the EU summit, insisting she would not make concessions. But Italy and Spain broke the will of the iron chancellor by out-negotiating her in the early hours of Friday morning. Germany caved in to demands for less stringent bailouts and direct aid to banks. Mario [...] Pleas from Spain and Italy for urgent financial aid from the eurozone to bring down borrowing costs were dismissed by Angela Merkel as divisions hardened on the eve of a critical summit. Germany’s Chancellor angrily rejected desperate pleading by Italy and Spain as a Franco-German rift over eurozone debt sharing threatened to unravel efforts to find a fix for the single currency at a meeting of European leaders on Thursday. Before flying [...]
He also says Italy cannot afford these high rates either. He did not appear to mention Greece though and the ultra high rates they are expected to pay: Spanish Prime Minister Mariano Rajoy has said Spain cannot afford to finance itself for long at current rates. Spanish 10-year government bonds have been trading at yields above 6.8%, coming close to the 7% considered unaffordable. Mr Rajoy was speaking ahead of the EU [...] 09.14 Some bad news for Mrs Merkel as she prepares to meet other Eurozone leaders later. The latest index of German business sentiment fell in June to 105.3, its lowest level in over two years. 09.12 Ahead of the ‘Big Four’s meeting at midday, Reuters has rounded up what we can perhaps expect from the pow-wow. Friday’s meeting will search for ways to achieve fiscal and banking union in the euro zone and, more urgently, it may also [...] Spanish Prime Minister Mariano Rajoy made a plea on Saturday for greater political and fiscal union in Europe, urging Greeks to stick with the euro as they gear up for an election whose outcome will shape the single currency’s future. Saying Spain’s business, banks and regional governments were struggling to finance themselves at current high borrowing costs, he urged Europe to integrate its banking system more closely, although he did not [...] Wolf Richter, Testosterone Pit “I believe, no,” is how Italian Prime Minister Mario Monti answered the question if Italy would seek a bailout—lacking the bravado and vehemence with which Spanish Prime Minister Mariano Rajoy had claimed for the longest time that Spain wouldn’t need one. Until it needed one.
The question was hot. It followed the kerfuffle that ensued when Austrian Finance Minister Maria Fekter had let it slip Monday that Italy, given [...] Greek party Syriza: ‘Deal shows Europe abandoning policy of austerity’ Angry Greeks are demanding better terms on their country’s bailout after Spain was handed what they see as a ‘no-strings attached’ €100billion cash [...] Will Spain’s bailout boost the markets on Monday? As Abram Brown points out the markets are eager for good news. But there are serious question marks over the bail out. Not least that the Spanish can’t seem to agree on what they have agreed to. And Euro zone members don’t actually know how they are going to pull off this refinancing. What they believe they have done is create a plan that [...] |
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