Spain says it may seek international aid in December

darkman2

MADRID, Nov 25 (Reuters) - Spain's People's Party (PP), due to form a new government by mid-December, is considering applying for international aid as one option for shoring up its finances, sources close to the party say.

The PP inherits an economy on the verge of recession, a tough 2012 public deficit target, financing costs driven to near unsustainable levels by nervous debt markets and a battered bank sector with billions of euros of troubled assets on its books.

But Tuesday's launch by the International Monetary Fund of a credit facility for fiscally responsible countries at risk from the euro zone debt crisis gives it a potential lifeline it may wish to exploit.

"I don't believe the decision (to seek aid) has been made .. but it is one of the options on the table, because I've been asked about it. But we need more time and more information on the current state of things," one source close to the PP told Reuters.

A senior economic consultant to the PP confirmed to Reuters an application for IMF credit was just one option. In itself it would be insufficient and considered a transitory move, the consultant said.

Help under similar conditions may soon be available from the euro zone's European Financial Stability Facility rescue fund, which the bloc's policymakers plan to make more potent.

If extra funding is needed, either from the EFSF or the IMF, it would be politically preferable to make the decision independently and quickly, rather than being compelled by market forces at a later date.

"If we have to do it, we have to do it now," the first source said.

http://www.reuters.com/article/2011/11/25/spain-aid-idUSL5E7MP21420111125


The straw that breaks the camels back? aka the Eurozone?

At least the Spanish seem more pragmatic and less proud then the "we can borrow at 10%" Italians.

The yield on Spanish 10 year bonds rose to 6.7% yesterday

http://www.bloomberg.com/apps/quote?ticker=GSPG10YR:IND


Belgium is in big trouble too. It's credit rating was also downgraded yesterday.

Kristopherus

The end is nigh:D:D:D

darkman2

Here is a sneak peak at December's upcoming (25th?) emergency summit of EU leaders;)

https://www.youtube.com/watch?v=dsx2vdn7gpY

AllGunsBlazing

darkman2 wrote: »

At least the Spanish seem more pragmatic and less proud then the "we can borrow at 10%" Italians.

I'm not sure if it's a case of Italy being too proud so much as it is the fact that right now there is no bail out fund big enough for them to go in to. I think they have little choice but to stay in the markets because the alternative would simply break the EU's back.

In fact Spain may have to take their chances in the bond markets for a while yet. If I'm not mistaken the bail out fund was to be beefed up at a meeting a few weeks ago. But nothing like the money that it needs was added to it.

Finnbar01

How much money would be needed to bail out Spain and Italy? Isn't it something like €1.5 trillion?