by Reality Check » Fri Jun 29, 2012 2:12 pm
http://www.telegraph.co.uk/finance/fina ... thing.html
http://www.consilium.europa.eu/uedocs/c ... 131359.pdf
http://blogs.wsj.com/marketbeat/2012/06 ... eu-summit/
http://online.wsj.com/article/SB1000142 ... 55190.html
The Spanish Bank Bailout plan that was hailed as the solution to the Spanish Bank problems has been abandoned.
The abandoned plan required Spain to receive a bailout in the form of a loan and then give the money to the Spanish Banks.
There were two problems with this:
1. All other countries who received Bailouts were required to agree to austerity measures, and Spain did not want to.
2. The new bailout loan to Spain would increase the total Spanish debt by 100 Billion and the mere announcement of it caused Spanish government borrowing rates to jump over 7%.
That one month old plan has now been abandoned and replaced by an announced direct bailout of the Spanish banks by an EU wide bailout fund.
Details on the new plan are sketchy except that it will not be delivered through the Spanish government, thus avoiding the addition of 100 Billion Euros to Spain's debt overnight.
The details that have been released appear to indicate that it will not involve any new commitments of money ( or new guarantees ) from EU countries, but instead only use funds from already existing bailout funds that had previously received "very limited commitments" from all EU countries. The total value of these previous commitments was estimated at around $600 Billion Euros, but some of it has been already been expended bailing out Greece and other countries.
[url]http://www.telegraph.co.uk/finance/financialcrisis/9363900/Debt-crisis-Germany-caves-in-over-bond-buying-bank-aid-after-Italy-and-Spain-threaten-to-block-everything.html[/url]
[url]http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/131359.pdf[/url]
[url]http://blogs.wsj.com/marketbeat/2012/06/29/some-good-news-for-markets-in-eu-summit/[/url]
[url]http://online.wsj.com/article/SB10001424052702304830704577494693764255190.html[/url]
The Spanish Bank Bailout plan that was hailed as the solution to the Spanish Bank problems has been abandoned.
The abandoned plan required Spain to receive a bailout in the form of a loan and then give the money to the Spanish Banks.
There were two problems with this:
1. All other countries who received Bailouts were required to agree to austerity measures, and Spain did not want to.
2. The new bailout loan to Spain would increase the total Spanish debt by 100 Billion and the mere announcement of it caused Spanish government borrowing rates to jump over 7%.
That one month old plan has now been abandoned and replaced by an announced direct bailout of the Spanish banks by an EU wide bailout fund.
Details on the new plan are sketchy except that it will not be delivered through the Spanish government, thus avoiding the addition of 100 Billion Euros to Spain's debt overnight.
The details that have been released appear to indicate that it will not involve any new commitments of money ( or new guarantees ) from EU countries, but instead only use funds from already existing bailout funds that had previously received "very limited commitments" from all EU countries. The total value of these previous commitments was estimated at around $600 Billion Euros, but some of it has been already been expended bailing out Greece and other countries.