Wendy WilliamsSPAIN’S economic troubles have taken yet another twist after 28 of its banks were downgraded.
Ratings agency Moody’s took the action against lenders, including Santander, on the same day that Spain formally requested a €100 billion bailout of its banking sector.
Some of the banks were downgraded by as much as four points and taking them deeper into ‘junk’ status.
Moody’s claimed it had acted because of Spain’s reduced ability to support its lenders and due to the vulnerability of the banks to the failed property market.
Economy minister Luis de Guindos however was much more upbeat, claiming the rescue package would cover all banks’ needs as well as providing a security buffer.
Two independent audits of Spain’s banks last week estimated the need for up to €61 billion, although the full results of the audit will not be delivered until September.
Spanish borrowing costs had soared past the critical seven per cent mark last week, but later settling down again, falling back to 6.5 per cent.
The announcement of Spain’s formal request for help was followed by reports suggesting that Cyprus may ask for financial aid due to its exposure to the ailing greek economy.
I foresee just the BEGINNING of a financial disaster.
Executives of PRIVATE banks took excessive risks on properties & on other countries’ debts. But these Execs were still well paid, and with Bonus even when their Banks were failing. So now the Spanish government requests a Bank Bailout from the EU for about 100 Billion Euros to cover Bank Execs’ errors. Great – will they do this with OTHER private firms in Spain too??! WHO pays for this – taxpayers?
Merkel has got a point. She listens to Spain (and others) begging for help and just knows that if Germany keeps bailing them out, they themselves will lose credibiility amd that will affect Germany’s credit ratings in the future. Spain had the good times, and chose to blow it all on mad schemes with terrible (i.e. zero) accounting and corruption that was allowed to continue for decades.
Spain now has to make real structual improvements. Merkel is spot on in her analysis.
Angela Merkel has got a point. She listens to Spain (and others) begging for help and just knows that if Germany keeps bailing them out, they themselves will lose credibiility amd that will affect Germany’s credit ratings in the future. Spain had the good times, and chose to blow it all on mad schemes with terrible (i.e. zero) accounting and corruption that was allowed to continue for decades.
Spain now has to make real structual improvements. Merkel is spot on in her analysis.
I think IF Merkel ever asks Germans to pay for Bailouts of other EU countrys’private Banks, or Governments – she’s out!
The EU Commission is violating a basic economic principle of capitalism – PRIVATE firms live, prosper or die based on their OWN results. Over recent years, the EU to foster itself, has offered financial support to private firms to protect investors, depositors, executives, public servants, etc. This manipulation of the economic principle DOES NOT WORK. So we approach the point where Taxpayers REFUSE to pay bailouts to failures… even timid UK is getting there!
1) There is NO succesful currency supported by a NON country – and the EU is a NON country, 2) NON fiscally qualified countries were allowed to join as EU Members (to grow the prestige of the EU) and are failing miserably, 3)
Only countries DESPARATE for Bailouts will accept EU domination/mandates and loss of their sovreignty 4) Unless countries can adjust their currency value to temper their OWN economic challenges, they will HAVE to leave the EU.
ps. The concept of “The United States of Europe” was stated by Lenin in about 1914. He didn’t succeed, nor will the EU.
Alot can be positively said for a Common Trade Agreement between countries who maintain their own sovreignty.