Eurozone agrees to lend Spain up to €100 billion ($125 billion)

Reuters ^ | Sat Jun 9, 2012 3:37pm EDT | Luke Baker and Julien Toyer

[Olog-hai]

Eurozone finance ministers agreed on Saturday to lend Spain up to €100 billion ($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 2½-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.

"The loan amount must cover estimated capital requirements with an additional safety margin, estimated as summing up to €100 billion in total," a Eurogroup statement said.

Spain said it wanted aid for its banks, but would not specify the precise amount until two independent consultancies—Oliver Wyman and Roland Berger—deliver their assessment of the banking sector's capital needs some time before June 21.

"The Spanish government declares its intention to request European financing for the recapitalization of the Spanish banks that need it," Economy Minister Luis de Guindos told a news conference in Madrid.

He said the amounts needed would be manageable, and that the funds requested would amply cover any needs.

A bailout for Spain's banks, beset by bad debts since a property bubble burst, would make it the fourth country to seek assistance since Europe's debt crisis began. With the rescue of Greece, Ireland, Portugal and now Spain, the EU and IMF have now committed around €500 billion ($625 billion) to finance European bailouts. …

[BfloGuy]

which they call the “Anglo-Saxon economic model

The Germans forget that they're half of that model.

[Praxeologue]

This “loan” is really being financed largely by the frightened Germans. Basically it is another futile financial gimmick. The capital squandered by three generations of deficit spending cannot be easily replaced. Greece was the opening act. Now comes Spain, later Italy and France. The Germans ought to realize that they simply do not have the wealth to stave off European bankruptcy. Their efforts will not be enough or even appreciated. They will ultimately be blamed in the end. Best course is to forget about bailouts, let bankruptcy and rock bottom occur, use aid as charity, and let the true rational recovery and rebuilding begin.

The Germans want a captive export zone for their manufacturing. The question is: how high a price are they willing to pay for the privilege? The vassal states (borrowers) know this and will push Germany to the limit or beyond it. Germany will decide to cut some loose, and pay the price, and keep some in the fold, and pay the price. To date, they have not succumbed to giving the serfs a vote, aka fiscal union. Meanwhile, they continue to export.

They are milking the cows, which are saying "Either buy me or upgrade my feed."

[Olog-hai]

Not according to them. They’re all about the Soziale Marktwirtschaft . . . and as far as peoples go, they see the “Angles” as quite separate. The EU elites do curse the free market.

[USMCPOP]

What’s the old definition of insanity? When you try the same thing over and over expecting a different result.

I like to keep banging my head on the wall,

A little boy told his Pop,

I like to keep banging my head on the wall,

'cause it feels so good when I stop.

[BfloGuy]

The EU elites do curse the free market.

I know. I was being semi-facetious.

[yefragetuwrabrumuy]

[Revolting cat!]

And all you gotta do is find yourself in the right place at the right time!

[doggieboy]

That would also include people that buy US Treasury bonds.

[SeminoleCounty]

The problem is we have people here in this country that want to commit the same insanity...only with Mexico, North Amer. Union, NAFTA, Amero currency, etc

Would not be surprised there are some US dollars involved in this Spanish bailout. Note, that, unlike Greece...we have actual Spanish banks doing business in the USA (BBVA, Bank of Madrid)

[Lurker]

This isn’t enough by half.

[John W]

Amen. Was interesting watching this story as reported on NBC Nightly News Sunday by anchor Lester Holt. He touted it as a fantastic development. The reporter or commentator he then interviewed regarding it couldn’t have said “for now” many more times or in many more ways. Surprised me for NBC.