by John Galt
June 9, 2012 13:18 ET
Per breaking news in El Confidencial in Spain, the maximum amount that Brussels will authorize is € 100,000 million (€ 100 billion) which means that Spain will be left on their own to fund any future or additional bail outs for their banking system. From the article translated using Google Translate(original in Spanish at this link):
The total amount of the ransom to Spain could amount to 100,000 million euros, according to sources at The Confidential financial and community sources confirm to various international media. This figure is the “ceiling” of a line of credit that would provide the Spanish Government, but finally could use a lower figure. The request could occur today at the Eurogroup meeting, according to sources, but may also be delayed a few days. The sources added that this rescue impodrá macroeconomic conditions beyond pure financial sector.
“It is a figure for the markets and does not mean that the actual disbursement reach that amount,” said a source quoted by the Wall Street Journal, which advances to the final declaration of the conference of ministers of the EU that takes place in these now asked Spain to resolve economic imbalances that the eurozone had highlighted above.
With so powerful a figure is to launch a message that the Spanish banking problem has been resolved. The 100,000 million is well above the 40,000 of the equity gap identified in the stress test conducted by the IMF, and even the 60,000 that result from multiplying that amount by 1.5, estimate by the same organism. The Swedish Prime Minister Fredrik Reinfeldt, it was set at 80,000 million.
100,000 million is the volume that the EU has reserved for the rescue but the precise figure has to define the Spanish Government. In principle, half would be provided by the European rescue fund (EFSF) and the new financial stability mechanism (ESM), and cash would be injected and also in bonds , as advance The Confidential. It is not known if the Minister of Economy, Luis de Guindos, the defined today or if instead it limitirán to ensure a political settlement that ensures the rescue of troubled institutions as Bankia, before the Greek elections on 17 June.
Obviously their memories are quite short as this amount will be insufficient barring a miraculous recovery in the Spanish economy and reform of the Socialist based government welfare state. Spain however, will not react like Greece and will immediately deteriorate into a left versus far left schism with the revolutionary and nationalist movements clashing as conditions deteriorate under the auspices of Brussels inspired austerity programs.
Ah For Whom the Bell Tolls….too bad it is for liberty, freedom, and capitalism in Spain as well as the remainder of the PIIGs soon enough….