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 telegraph.co.uk ...
Betcha there’s a boatload of crony socialist corruption in all that toxic Euro debt. Somebody’s skimmin’.
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
It seems planned.
Their answer is always the same more centralized power
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.
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
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
lol. Well played, Sir!
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.