Tuesday, May 8, 2012

Spain Bank Bailout is Latest Eurozone Financial Setback

Shoot, let them fail. The bailouts have gone on long enough.

At Zero Hedge, "The Spanish Bank Bailout Begins."

And Telegraph UK, "New eurozone crisis looms as Spain prepares bail-out":
A new eurozone crisis is looming as Spain signalled on Monday it was ready to bail out ailing banks after markets shrugged off the election results in France and Greece.
Prime minister Marian Rajoy indicated the Government was ready to intervene to save banks wrestling with the collapse of the housing market.

Bankia, Spain's fourth biggest bank, is the first in line for state aid. Rodrigo Rato, chairman and former IMF managing director, swiftly resigned after it was disclosed the finance ministry was preparing to refinance the bank and introduce legislation to protect the balance sheets of others.

Spain, which also signalled it could dock its only aircraft carrier to save €30m a year, is already struggling to cope with an austerity drive that has pushed the jobless total up to nearly 25pc of the workforce.

Mr Rajoy insisted that any bank bail-out would not compromise the tough targets set by Brussels to reduce the budget deficit.
Peter Kenny, managing director at Knight Capital, said Spain's action was positive because "it's them taking ownership of their own issues".

Fears of a fall-out in financial markets after the election results in France and Greece were short-lived. Shares and the euro recovered after initial falls as investors reasoned any policy changes in the eurozone recovery programme were some way off.

But the turmoil in Greece produced by a backlash against a tough austerity programme and the failure of early efforts to form a coalition government heightened speculation the country would be forced out of the eurozone.

Citi's European economics team said there was a "rising risk of a Greek exit from the euro within the next 12 to 18 months."
Also at NYT, "Executive Chairman Resigns at Bankia, the Troubled Spanish Real Estate Lender."