Note: The following was reported in Zerohedge.com and it is reprinted here but it’s accuracy has not been verified. See competing story below.
's Not Getting a
Bailout... Neither is Spain ... It's the END GAME
Submitted by Phoenix Capital Research on
As one would expect in this situation, things are rapidly going into hyper-drive in
. The weekend before last the country implemented
capital controls including: Spain
- A minimum fine of €10,000 for taxpayers who do not report their foreign accounts.
- Secondary fines of €5,000 for each additional account
- No cash transactions greater than €2,500
- Cash transaction restrictions apply to individuals and businesses
Does this sound like the actions of an economy with a sound banking system?
On a related note,
is once again back on the brink: in the last 2 weeks
Italy ’s Prime Minister Mario Monti has said that the
country is “flirting with economic disaster… [and] in a crisis.” He, like Italy ’s PM Rajoy, has pushed for the ESM to buy sovereign
bonds. He’s also asked the ECB to implement a mechanism through which it would
buy Italian sovereign bonds whenever the spread between them and German bunds
grows too large (a type of bailout). Spain
Indeed, things are so desperate that he invited German Chancellor Angela Merkel, French President Francois Hollande, and Spanish Prime Minister Mariano Rajoy to an emergency meeting in
over the weekend. His goal was to convince EU
leaders to allow Rome to receive funding directly from the EFSF and ESM. Italy
The ECB and
have already rebuked this idea: Germany
ECB Weidmann: Strongly Against Monti's Proposal For Unconditional Funding
European Central Bank Governing Council member Jens Weidmann strongly opposed the proposal of Italian Prime Minister Mario Monti through which
could receive billions of euros from the European
rescue umbrellas (EFSF and ESM) without meeting the assigned conditions of the
aid, Sueddeutsche Zeitung reported. Italy
, the advantage of Mr. Monti's proposal is simply to
avoid meeting the strict saving and reform requirements that are conditional to
receive the aid. That in turn would create a unique funding path for Italy unlike what other European countries like Italy and Greece had to accept to get bailed out. Portugal
Mr. Weidmann on the other hand considered that as a "detour" that would result in a state funding which is prohibited by the EU treaties and would undermine the regulatory framework of the monetary union. Besides,
already tried a similar method in the 1970s and
failed, according to the report. Italy
Eurozone rift deepens over debt crisis
Leaders of the eurozone’s four largest economies pledged on Friday to back a €130bn growth package and defend the common currency but remained divided over the credit crisis as
continued to resist proposals to issue common debt
and use bailout funds to stabilise financial markets. Germany
The meeting in
was intended to demonstrate a coming together ahead
of next week’s EU summit, but ended in disagreement over the need for
short-term intervention in the markets and how to achieve greater political and
financial union. Rome
At a joint press conference Angela Merkel, German chancellor, declined to endorse affirmations by all three of her co-heads of government – Italy’s Mario Monti, François Hollande of France and Spain’s Mariano Rajoy – of the need to use the eurozone’s bailout funds to “stabilise financial markets”…
Instead, Ms Merkel said
Europe needed to respect existing rules and had to work towards common
structures to regulate the euro rather than have policies emanating from “17
parliaments each with national sovereignty”.
“If I am giving money to Spanish banks … I am the German chancellor but I cannot say what these banks can do,” she said.
Merkel and Weidermann’s points here are crucial. There is no way that either can OK giving German funds (ultimately
is the real backstop for the EFSF and ESM) without conditions. Why
should Germany risk its AAA status to prop up countries that have
proven to be unwilling to implement any meaningful reforms and whom actually
lie openly to Germany ’s face time and again? Germany
is meant to contribute 18% of the ESM’s funding… so
if Italy needs a bailout… Italy
With that in mind, if you’re not already taking steps to prepare for the coming collapse, you need to do so now. I recently published a report showing investors how to prepare for this. It’s called How to Play the Collapse of the European Banking System and it explains exactly how the coming Crisis will unfold as well as which investment (both direct and backdoor) you can make to profit from it.
This report is 100% FREE. You can pick up a copy today at: http://www.gainspainscapital.com
PS. We also feature numerous other reports ALL devoted to helping you protect yourself, your portfolio, and your loved ones from the Second Round of the Great Crisis. Whether it’s a US Debt Default, runaway inflation, or even food shortages and bank holidays, our reports cover how to get through these situations safely and profitably.
Spain bank could get bailout money within weeks - AP
Spain will have access to up to (EURO)100 billion ($126 billion) in rescue loans from the 17-country eurozone's bailout fund for its banks, many of which were stung by the collapse of a real estate bubble and left holding billions in bad loans and foreclosed property.
The terms - including the amounts and interest rates - are still subject to negotiation, however, and will be announced July 9 at a meeting of eurozone finance ministers.
The Spanish government will take the rescue money and feed it to the banks gradually, rather than in a lump sum, and banks will get different terms depending on their financial condition, Luis de Guindos told a breakfast gathering of business leaders and media.
He said the overall loan, which the government will ultimately be responsible for repaying, will carry favorable interest rates and and repayment schedule.
At first, the money will come from the soon-to-be launched permanent bailout fund, called the ESM, and count as government debt. Eventually, once a single European banking supervisory body is created as agreed at a summit last week, the rescue money will go directly to the banks for recapitalization, not adding to the government's debt load.
De Guindos also had cautious praise for an economic statistics that came out Tuesday: the number of people registered as unemployed in
went down sharply in
June as employers embarked on a hiring spree to prepare for the country's busy
summer tourism season. Spain
The ministry said in a statement Tuesday that the decline was the largest drop for June ever recorded.
De Guindos called the number good and said "let's hope it consolidates."
The nation's unemployment rate is released separately and quarterly. It stood at 24.4 percent at the end of March - the highest rate among the 17 nations that use the euro.
's jobless rate is 52
percent for those under age 25. Spain
The economy was hit hard by the implosion of a real estate bubble in 2008. That caused property prices to plummet and unemployment to spike as construction jobs dried up.
As concern grew that
's public finances may
be overwhelmed by the cost of rescuing banks - its budget deficit is almost 9
percent, about three times the EU limit - the government was forced to make
painful austerity cuts, such as public sector job cuts. That has helped pushed
the economy into its second recession in two years. Spain