Banking cardell cabinets crisis: Why Spain is suffering? | Broome
Until 3-4 years ago, Spain was cited as an example of the extraordinary success as an economic miracle, a country with economic growth, well above the euro zone average, with unemployment below 5%, with a public debt of 36% in relation to GDP the. But, beyond these impressive figures, apparently, maskoheshin important macroeconomic imbalances and financial. Currently, the banking sector in particular and the Spanish economy itself, cardell cabinets are at a dangerous crossroads and crisis troubling, not only for Spain, but for the entire eurozone. The emergence of problem bank "Bank", cardell cabinets one of the four largest banks in the country, opened "Pandora's box" for the entire Spanish banking system. Bank of Spain Governor resigned a month before he ended mandate, adding a more questionable allegations. "Bankia" asked the government for help, initially 23.5 billion euros in May 2012, later discounted by the amount of 19 billion euros to recapitalize, but the ECB reacted by stating cardell cabinets that he would not allow that Spain to exploit its funding to recapitalize "banks" -n, or other banks in trouble.
The government responded that the banks could escape without the intervention of the ECB. But for financial markets, that do not support at all logic "quixotic" the only savior of the Knights, this was the signal of departure from Treasury bonds and other financial securities Spanish banks. Interest rates on treasury bills immediately went to 6.7%, or 15.5% higher than German bonds interests, thus approaching the dangerous 7% level that forced Greece some time ago, Ireland and Portugal to turn to the EU. Spanish Budget Minister, Cristobal Montoro, qualifies cardell cabinets the high interest rates as the main indicator that "Spain is terrific narrows access to financial cardell cabinets markets." Pressure markets became too strong, forcing the government of Prime Minister Rajoy, to resort to "... the EU financial assistance to support his country and save the banking system is in big trouble" . Most urgent problems are "financing and recapitalization of banks, liquidity issues, and debt service." Preferable route would be buying Spanish debt by the ECB, but such a hope is not getting the proper support from the ECB, which ceased buying more debt of different member countries of the eurozone.
The main problem is the size of the economy, which ranks fourth in the euro area and represents 12% of its GDP, while Ireland, Portugal cardell cabinets and Greece together represented only 6% of its GDP. But rescue plans for these countries so far have cost approximately 85 billion, 78 billion and 292 billion euros, indicating that if it comes to saving Madrid, the figures will be much larger. Despite Spain's current refusal to submit to a "rescue plan that will lose the budgetary sovereignty", financial institutions estimate that "... to save Spain from the devastating effects of the financial markets in the next three years will needed over 600 billion euros, neither Spain has not, and neither can the eurozone itself to accord ". Through MES-it1, Europe has a total of 750 billion euros and can not consume over 80% of it just for Spain. The only hope remains the strategy of "rescue of the banking sector and direct recapitalization of banks", estimated at about 100 150 and possibly up to 200 billion euros, which can be found at ja2 EFSF, which already owns over 450 billion Euro fund that can recapitalize banks by issuing bonds, as it did in the case of Greece. The realization of this scenario requires the elimination cardell cabinets of the German rejection. Spain, to avoid "financial sovereignty handover", seems to prefer a direct recapitalization of the banks, without going the whole mechanism of the banking sector tutelage of Brussels, while Berlin insists that "neither the EFSF nor lo and behold MES are not authorized to directly capitalize cardell cabinets the banks. " Consequently, "... passing through a public cardell cabinets entity guarantor, for the use of European funds is mandatory". Eurozone looks ready to respond positively to the request of the Spanish government, cardell cabinets to give her an assistance of 100 billion euros, of reviewable in a second phase, after the results of the audit of the banking sector. So, is not expected to have any austerity plan similar to that of Greece, Portugal or Ireland, but only a commitment to Madrid, to strictly enforce its requirements for the banking sector. cardell cabinets The Spanish government considers this alert Eurogrup as a "victory for the credibility of the euro", as a "reward" for extraordinary measures to reform Spain
Until 3-4 years ago, Spain was cited as an example of the extraordinary success as an economic miracle, a country with economic growth, well above the euro zone average, with unemployment below 5%, with a public debt of 36% in relation to GDP the. But, beyond these impressive figures, apparently, maskoheshin important macroeconomic imbalances and financial. Currently, the banking sector in particular and the Spanish economy itself, cardell cabinets are at a dangerous crossroads and crisis troubling, not only for Spain, but for the entire eurozone. The emergence of problem bank "Bank", cardell cabinets one of the four largest banks in the country, opened "Pandora's box" for the entire Spanish banking system. Bank of Spain Governor resigned a month before he ended mandate, adding a more questionable allegations. "Bankia" asked the government for help, initially 23.5 billion euros in May 2012, later discounted by the amount of 19 billion euros to recapitalize, but the ECB reacted by stating cardell cabinets that he would not allow that Spain to exploit its funding to recapitalize "banks" -n, or other banks in trouble.
The government responded that the banks could escape without the intervention of the ECB. But for financial markets, that do not support at all logic "quixotic" the only savior of the Knights, this was the signal of departure from Treasury bonds and other financial securities Spanish banks. Interest rates on treasury bills immediately went to 6.7%, or 15.5% higher than German bonds interests, thus approaching the dangerous 7% level that forced Greece some time ago, Ireland and Portugal to turn to the EU. Spanish Budget Minister, Cristobal Montoro, qualifies cardell cabinets the high interest rates as the main indicator that "Spain is terrific narrows access to financial cardell cabinets markets." Pressure markets became too strong, forcing the government of Prime Minister Rajoy, to resort to "... the EU financial assistance to support his country and save the banking system is in big trouble" . Most urgent problems are "financing and recapitalization of banks, liquidity issues, and debt service." Preferable route would be buying Spanish debt by the ECB, but such a hope is not getting the proper support from the ECB, which ceased buying more debt of different member countries of the eurozone.
The main problem is the size of the economy, which ranks fourth in the euro area and represents 12% of its GDP, while Ireland, Portugal cardell cabinets and Greece together represented only 6% of its GDP. But rescue plans for these countries so far have cost approximately 85 billion, 78 billion and 292 billion euros, indicating that if it comes to saving Madrid, the figures will be much larger. Despite Spain's current refusal to submit to a "rescue plan that will lose the budgetary sovereignty", financial institutions estimate that "... to save Spain from the devastating effects of the financial markets in the next three years will needed over 600 billion euros, neither Spain has not, and neither can the eurozone itself to accord ". Through MES-it1, Europe has a total of 750 billion euros and can not consume over 80% of it just for Spain. The only hope remains the strategy of "rescue of the banking sector and direct recapitalization of banks", estimated at about 100 150 and possibly up to 200 billion euros, which can be found at ja2 EFSF, which already owns over 450 billion Euro fund that can recapitalize banks by issuing bonds, as it did in the case of Greece. The realization of this scenario requires the elimination cardell cabinets of the German rejection. Spain, to avoid "financial sovereignty handover", seems to prefer a direct recapitalization of the banks, without going the whole mechanism of the banking sector tutelage of Brussels, while Berlin insists that "neither the EFSF nor lo and behold MES are not authorized to directly capitalize cardell cabinets the banks. " Consequently, "... passing through a public cardell cabinets entity guarantor, for the use of European funds is mandatory". Eurozone looks ready to respond positively to the request of the Spanish government, cardell cabinets to give her an assistance of 100 billion euros, of reviewable in a second phase, after the results of the audit of the banking sector. So, is not expected to have any austerity plan similar to that of Greece, Portugal or Ireland, but only a commitment to Madrid, to strictly enforce its requirements for the banking sector. cardell cabinets The Spanish government considers this alert Eurogrup as a "victory for the credibility of the euro", as a "reward" for extraordinary measures to reform Spain
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