By Daryl Montgomery: After weeks of Spanish officials denying that Spain needed a bailout, eurozone finance ministers agreed on Saturday to up to $125 billion rescue of Spanish banks. Spain is now the fourth member of the EU to seek assistance since Europe's debt crisis began in late 2009.
Today, we're fortunate to have Mark Copelovitch, Assistant Professor of Political Science and Public Affairs at the University of Wisconsin, as a Guest Contributor.
First off, let me thank Menzie for the opportunity to "pinch hit" here at Econbrowser. It's a pleasure to be here.
The head of the German central bank, Jens Weidmann, is pressing Spain to seek a bailout for troubled banks from the eurozone's current rescue fund, the EFSF."If Spain feels overwhelmed by its financial needs, it should use the instruments which have been created for that," Weidmann said in an interview to appear on Sunday in the weekly Welt am Sonntag."The motto must not be: Above all no rescue funds. Hoping for central bank aid to avoid fulfilling one's responsibilities is a bad move," the Bundesbank chief was quoted as saying in a pre-release of the interview.
Time to breathe a sigh of relief, with resolution of the Greek bailout? Not so fast. Greece is likely to need re-adjustments to its plan  Plenty of challenges remain in the eurozone; PIMCO's El-Erian says Portugal is next . In fact, as Jeffry Frieden and I argue, the resolution of the problems facing eurozone policymakers is likely to be contentious and prolonged.