Euro crisis: Spain the latest to seek a bailout.

[Hibernia&Alba]

The fourth country in the euro to do so, after Ireland, Portugal and Greece, and as usual German taxpayers will pick up most of the tab for this rescue package that could be anywhere between 40 and 150 billion euros, making it much bigger than the others. In this case it's Spain's banking sector that need the money, much like the global credit crunch of 2008, rather than its being due to a public expenditure crisis, as in Greece. The fear is the problem could spread to France which has huge amounts of money lent to the Spanish banks and which could really scupper the euro.

The euro seemed fine in the growth years, but the model of a single currency and economic policy without a single government seems to struggle in crisis when national politics has to compete with the greater good. It then seems impossible to get political agreement commensurate with the seriousness of the economic challenges. So do they -

1, Try to go on as before - one currency and a mayriad of domestic governments

2, Go the whole hog to political union within a federal framework

3, Scrap the euro and return to national currencies, effectively destroying the EU project

I think they'll take the cautious approach of option one, but whether its truly sustainable on that basis is a big question.

[Eyrie]

The intention, as admitted by Merkel during the week, is to eventually secure the second option. Quite how practical this will be, given the very different nature and circumstances of the countries involved, is something that most people remain to be convinced by.

Option 3 will involve a lot of short term pain for the departing countries, and involves too great a loss of face for the politicians and bureaucrats to tolerate.

So that leaves option 1. In the absence of a proper bail out/support structure there will be more of the same, lurching from one crisis to another.

Not a fan of Gordon Brown, but I give him a lot of credit for keeping us out of the euro when Blair wanted us in.

[Big Ed]

So, let me see if I have got this right:
The Spanish Government borrows money, to be paid back at unaffordable rates of interest from the public purse and then gives it to private corporations that helped to cause the problem in the first place.
This is lunacy, is it not?

[magpie1892]

Not a fan of Gordon Brown, but I give him a lot of credit for keeping us out of the euro when Blair wanted us in.

Brown wanted the UK in the Euro but he wanted to be the one to take us in, for his (who'd have thunk it!) personal aggrandisement. Hence selling gold at the bottom of the market and spending the tenner or so he raised on buying Euro. By the time he decided it was his 'turn' to be PM, things were already beginning to look dodgy in the Euro Zone so, being the shameless political opportunist, hypocrite, and liar that he is, he decided to take the credit for keeping us out of the euro. Some people bought the line at the time, just as they bought the line: 'an end to boom and bust'.

[magpie1892]

So, let me see if I have got this right:
The Spanish Government borrows money, to be paid back at unaffordable rates of interest from the public purse and then gives it to private corporations that helped to cause the problem in the first place.
This is lunacy, is it not?

A fair summation. I'd add the word 'fascist' to lunacy as there's no democratic mandate for 95% of the EU's machinations. Like the Third Reich, it's not going to end well, either (though hopefully we can avoid 100 million war dead and six million gassed Jews this time).

[steakbake]

Brown wanted the UK in the Euro but he wanted to be the one to take us in, for his (who'd have thunk it!) personal aggrandisement. Hence selling gold at the bottom of the market and spending the tenner or so he raised on buying Euro. By the time he decided it was his 'turn' to be PM, things were already beginning to look dodgy in the Euro Zone so, being the shameless political opportunist, hypocrite, and liar that he is, he decided to take the credit for keeping us out of the euro. Some people bought the line at the time, just as they bought the line: 'an end to boom and bust'.

Agree with this. The man is a charlatan.

[RyeSloan]

So, let me see if I have got this right:
The Spanish Government borrows money, to be paid back at unaffordable rates of interest from the public purse and then gives it to private corporations that helped to cause the problem in the first place.
This is lunacy, is it not?

Rather simplisitic I'm afraid...the Spanish government is far from innocent in this whole debacle.

[Big Ed]

Rather simplisitic I'm afraid...the Spanish government is far from innocent in this whole debacle.

I'm not seeking to defend the Spanish Government: merely to highlight that their banks get bailed out to the tune of 100 billion Euros, whilst the economy takes another boot in the baws.

[magpie1892]

Rather simplisitic I'm afraid...the Spanish government is far from innocent in this whole debacle.

Reckon you've been majorly 'whooshed' here, Si.

[Big Ed]

Reckon you've been majorly 'whooshed' here, Si.

:confused::confused: