Skip to comments.EU: Spanish bail-out 'impossible’, experts warn
Posted on 07/28/2012 4:59:51 PM PDT by bruinbirdman
A full-blown sovereign bail-out of Spain would be economically and politically impossible and cost up to 650bn (£510bn), an in-depth study has warned.
Firefighters in Barcelona take part in a mass rally against new austerity measures last week
Leading think-tank Open Europe made the estimate based on the assumption the Spanish government would be forced out of the markets for three years because of its unsustainable borrowing costs, as happened in Greece, Ireland and Portugal.
Between now and mid-2015, Spain has funding needs of 542bn, with its banks requiring up to 100bn on top of this. The Spanish regions possibly require another 20bn, according to the study.
A Greek-style bail-out for Spain would bleed dry the eurozones 500bn rescue fund, making an alternative solution essential.
Fears that Spain will need a sovereign bail-out mounted last week after the governments borrowing costs hit fresh highs and Catalonia followed Murcia and Valencia as a region which may be forced to turn to Madrid for assistance to meet its debt obligations.
The regions will not make or break Spain financially, but their bail-out requests show how politically difficult it will be for Spain to rein in spending and reform, said Raoul Ruparel, head of economic research at Open Europe.
The current bank rescue plan is clearly insufficient, while a full bail-out which could be in the region of 650bn is impossible.
Open Europe said the most likely scenario would involve a loan of around 155bn and more liquidity provision from the European Central Bank in Frankfurt.
However, even that could, at best, only buy Spain six months to a year, said Mr Ruparel.
Writing in The Sunday Telegraph, the chairman of Goldman Sachs Asset Management and one of the worlds leading economists, Jim ONeill, said
(Excerpt) Read more at telegraph.co.uk ...
Portugal and Greece were just small enough to sweep under the rug.
Spain is where the defecation hits the fan.
So it begins. (Sorry, HAD TO say it!)
Can’t we just give them some of Obama’s “stash”?
We already have...
You mean the money that used to belong to you and me?
Eventually, in the last analysis, there will be inflation. Everywhere. Sooner or later. It’s the only way out.
Watch for a channel right into U.S. Extortion-Care, for these sovereign funds.
Desperate now for real collateral to back these trash fraud funds, watch for extortion first, because many have gotten very used to living first-class off of everyone elses efforts, and therefore won’t back off.
Deflation in the short term yeah, in the long term sovereign governments will print more money. It’s what they do. Guaranteed.
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