After months of denials, a short Eurogroup Statement shows Spain will submit a formal request to Brussels for a bailout. Here is the statement in full.
The Eurogroup supports the efforts of the Spanish authorities to resolutely
address the restructuring of its financial sector and it welcomes their intention
to seek financial assistance from euro area Member States to this effect.
A few days ago Spain was purportedly going to need another €30 billion to €70 billion to recapitalize Spanish banks. I suggested the amount would be at least triple that and it did not take long to do so.
Yahoo! Finance reports Spanish bailout could reach 100 billion euros
A bailout for Spain's teetering banks, once requested by Madrid, could amount to as much as 100 billion euros, two senior EU sources told Reuters on Saturday.
By Marc Chandler:Greece has been the model for Portuguese and Irish aid. This may or may not have been fair and appropriate. After all, the nature of the Portuguese and Irish problems were dissimilar from Greece and each other. Spain's is more like Ireland's. The key differences include Spain's size, officials have progressed on a learning curve, and the now perceived greater vulnerability of the whole EMU project.
BERLIN (Reuters) - A deal is in the works that would allow Spain to recapitalize its stricken banks with aid from its European partners but avoid the embarrassment of having to adopt new economic reforms imposed from the outside, German officials say. While Berlin remains firm in its rejection of Spain's calls for Europe's rescue funds to lend directly to its banks, the officials said that if Madrid put in a formal aid request, funds could flow without it submitting to the kind of strict reform program agreed for Greece, Portugal and Ireland. ...
Spain formally became the fourth country to ask for bailout aid from the eurozone on Monday, June 25. Spain's short-term borrowing costs nearly tripled at auction on Tuesday. Market participants expect Moody's to further downgrade Spain's sovereign debt to Junk status.
By Marc Chandler:Investors ought not let recovery in the global capital markets in response to the broad brush strokes of an aid package for Madrid obscure the fact that the underlying quagmire just got deeper. The favorable market response is largely technical in nature and related to extreme positioning and the out-sized moves in May.
EU Throws Spain Two Deathlines; Spanish 10-Year Yield Tops 6.7%;
ECB Rejects Madrid Ponzi Refinancing Scheme
The markets are reeling in the wake of rejection of Spain's Ponzi Recapitalization Scheme by the ECB according to the Financial Times.