James BryceSPANISH Prime Minister Mariano Rajoy has warned the country faces tough times ahead, despite eurozone leaders agreeing a €100 billion bailout.
The rescue package was thrashed out by Eurozone leaders on Saturday in an effort to help Spain’s banking sector, which is struggling with billions of euros of debt related to the failed property market.
The markets responded positively following the news and Spanish bond yields dropped below six per cent, but Rajoy warned the recession will continue to bite.
“This year is going to be a bad one, growth is going to be negative by 1.7 per cent and unemployment will increase,” he said.
“Last year, the country’s public administration spent €90 billion more than it received. You can’t go on like that.”
Spain is the largest economy to require a bailout from the EU since the emergence of the single currency, and is the fourth in total.
The exact amount will be decided in the coming days following an audit of the country’s struggling banks, with the money set to be distributed by a specialist government agency.
Economy minister Luis de Guindos denied it was a bailout, claiming ‘this is not a rescue’.
“This is a loan which is given in very favourable conditions, which will be determined in the next few days,” he said.
“But they are very favourable – much more favourable than the market ones.”
Spain is in its second recession in three years, with the economy expected to shrink by 1.7 per cent this year and unemployment at nearly 25 per cent.
European Commission President Jose Manuel Barroso, said: “We are certain that Spain can gradually regain the confidence of investors and market participants.”
Glad the OP are calling it a “bail-out”, for that is what it is. The Men in Black have called, and will doubtless be called back by the end of the year. Spain does not even know the extent of its bank debts as the sector is run so badly.
That exactly what it is a “bail-out” but it appears that they are still in denial hu….it is not all over yet and they have a long way to go. I believe the banking system in Spain is not the only thing that is run badly. It is not the end for this particular crisis.
In my opinnion Spain will be facing bad times for looong time if they will continue to make stupid laws which at the end will help black markets. That is why Spain will not gain any money since all the people will rather work without a contract. Of course it will affect on pensions later on but who cares if you can manage to pay the bills right now! Viva España
“Economy minister Luis de Guindos denied it was a bailout, claiming ‘this is not a rescue’” – THEN DON’T ACCEPT IT!
Banks are PRIVATE firms, for financial benefits to their Employees, Shareholders and Investors/Depositors – not PUBLICLY owned ones. So Public at large benefits 0 based on Bank’s Managers’ results. Banks lose $ but Execs get Bonus!
If Bank Exec’s “wisdom” caused them to take undue risks (for which many got praise/bonus based on poor loans) please
LET THEM FAIL! Execs deserve/earned their job loss, Investors made a poor one, Depositors made errors where placing their $$. As seen in UK & US – Banks get “Bailout”,
Execs of failing firms get $$MM BONUSES. Wrong for taxpayers
OR: Give a Taxpayer funded Bailout to poorly managed Banks,
AND ALL OTHER POORLY MANAGED / FAILING FIRMS IN COUNTRY!!
Will Germany underwrite this $$$ ?!
Tough times ahead, glad it’s all been tickety boo so far.
Come on folks the silly bum scratching natives have nada to say in this – its a German masterplan to buy Mallorca, Torremolinos and Benidorm …….
message to the last poster ,frau merkel the president of the federal republic of europe actually is taking marbella she didnt like the look of torrmolinos at all…. far to many steps far to difficult to march down.
Yes Louie Lou but the beer and the sausages are wunderbar … and don’t forget the Germans make fantastisch mechanical stairs
Remember Adolf aka Mel Brook sang:
“I don’t want war! All I want is peace…peace…peace…!
A little piece of Poland,
A little piece of France,
A little piece of Austria
And Hungary, perchance!
A little slice of Turkey
And all that that entails,
And then a bit of England, Scotland, Ireland and Wales!”