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Europe ratchets up grip on Madrid
The Telegraph ^ | 10/23/2012 | Ambrose Evans-Pritchard

Posted on 10/23/2012 10:41:49 PM PDT by bruinbirdman

The EU-IMF Troika in charge of Spain's €60bn (£48bn) bank rescue is to demand much tougher action by the country's authorities to clean up toxic debts, risking a clash that could deter Madrid from requesting a full sovereign bail-out.

BNM Mare Nostrum, and other mid-tier "Group 2" banks such as Popular, Caja 3, and Liberbank, have little chance of tapping the markets to cover most of their capital deficits, according to Troika officials.

They are also losing patience with the glacial pace of cuts at Bankia and other nationalised lenders such as Catalunya-Caixa and Banco Valencia, according to the Spanish newspaper El Confidencial.

Brussels fears a repeat of the fiasco at Bankia, which had to be rescued just weeks after its recapitalisation plans had been approved. "We have had too many bad experiences with financial restructuring in Spain to be sure the plans will work this time," said one official.

Some of the banks are assuming large capital gains on assets that are in fact deeply underwater, and are counting on a 20pc rise in the IBEX index of stocks by the end of the year.

Madrid may see the escalating demands of the Troika as a foretaste of what could happen if Spain requests a sovereign rescue from the European Stability Mechanism (ESM), the pre-condition for the European Central Bank to start buying Spanish bonds.

Premier Mariano Rajoy is hoping to secure a bail-out with minimal conditions under a "precautionary credit line", but this is illegal for countries that have lost market access.

German lawmakers have warned that the Bundestag will impose tough terms which may include cuts to public sector jobs, a neuralgic issue in Spain.

Yesterday the Bank of Spain said the economy had contracted by 0.4pc in the third quarter. This was

(Excerpt) Read more at ...

TOPICS: Business/Economy; Crime/Corruption; Foreign Affairs; News/Current Events

1 posted on 10/23/2012 10:41:53 PM PDT by bruinbirdman
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To: bruinbirdman

Betcha there’s a boatload of crony socialist corruption in all that toxic Euro debt. Somebody’s skimmin’.

2 posted on 10/23/2012 10:56:54 PM PDT by lurk
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To: bruinbirdman

This should be an object lesson not to run your country into the ground with debt. But the protests all demand the status quo, massive unaffordable spending

3 posted on 10/23/2012 11:07:43 PM PDT by GeronL (
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To: lurk

It seems planned.

Their answer is always the same more centralized power

4 posted on 10/23/2012 11:09:49 PM PDT by GeronL (
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To: GeronL

What’s killing Spain isn’t so much the debt itself as the interest to service it. If the Chinese stopped buying our bonds, our interest rates would quickly climb to levels seen in Spain too. With the same results.

5 posted on 10/23/2012 11:12:06 PM PDT by Arthurio
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To: bruinbirdman; All

The only way these debts will ever be taken care of is by default or bankruptcy.

When these PIIGS, or severe debtor nations finally sack-up...and tell the EU/IMF/World Bank/Private Banks to go “fornicate with yourselves”....only then will this issue be resolved

Time for the banks to realize....part of the business is “taking risk”...and you lost. The government no longer can bail you out. Government cannot bail out every bbad loan

6 posted on 10/24/2012 3:38:38 AM PDT by SeminoleCounty (Political maturity is realizing that the "R" next to someone's name does not mean "conservative")
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To: bruinbirdman

Back in the EU
Back in the EU
Back in the EUSSR

Well, those great debts really knock me out
They kick the West’s behind
See Angela’s blubbery cellulite hanging out
That EU troika is always on my mi, mi, mi, mi, mind

7 posted on 10/24/2012 3:41:49 AM PDT by Sir Francis Dashwood ("Arjuna, why have you have dropped your bow???")
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To: Sir Francis Dashwood

lol. Well played, Sir!

8 posted on 10/24/2012 3:45:33 AM PDT by TADSLOS (Conservatism didn't magically show up in Romney's heart in 2012. You can't force what isn't in you.)
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