Posted on 09/04/2012 2:55:23 PM PDT by bruinbirdman
Spain has issued a veiled warning that it will not accept a full bail-out from Europe if the terms are too harsh, a move that would paralyse the European Central Bank and call the euro’s survival into question.
In an escalating game of brinkmanship, Spanish finance minister Luis de Guindos said his country is not yet willing to sign a Memorandum giving up fiscal sovereignty to EU inspectors. “First of all, one must clarify the conditions,” he told German newspaper Handelsblatt.
Mr de Guindos said the crisis engulfing the region is larger than any one country and warned north Europe not to scapegoat Spain.
“My colleagues are aware that the battle for the euro will be fought in Spain. Spain is right now the breakwater for the eurozone,” he said, adding that “solidarity” would be well-advised.
The warning comes as German Chancellor Angela Merkel leaves for Madrid for talks with premier Mariano Rajoy to thrash out the conditions of a full sovereign rescue of up €300bn (£238bn), beyond the €100bn bank rescue already agreed.
The ECB’s executive board met today to prepare crisis proposals for the governing council’s meeting on Thursday, including a “yield band” to lower borrowing costs for Spain and Italy.
The ECB has tied its hands under an implicit deal with Germany, announcing that it cannot proceed until Spain and Italy request help from the eurozone’s bail-out funds and submit to tough conditions.
Germany now seems fully behind the bond plan of ECB chief Mario Draghi. Jorg Asmussen, Germany’s ECB board member, said today that bond purchases are necessary to save the euro, therefore, within the bank’s mandate.
“The risk premia of sovereign bonds now reflect not just the insolvency risk of some countries but an exchange rate risk, which should not theoretically
(Excerpt) Read more at telegraph.co.uk ...
"Just a matter of time, I suppose."
Time for Spain to prepare their own currency. I hope other countries are making those preps too.
IMHO (and I’ve felt this way for a while) Greece will voluntarily leave the Euro about 5 minutes before they are kicked out. The ensuing chaos will serve as a warning to EU states that don’t “play ball”. The result will be much more “austerity” and the ability to kick the can down the road for some number of years.
Ole!
Hey, this is wonderful!
It turns out that beggars can be choosers!
AEP should have emphasized that in this article. Afterall, that's where the idea came from at least two years ago when Ireland went bust.
Also it should be remembered what "asking for an ECB bailout" means.
It means that a country turns over its fiscal sovereignty to the EU. The Commission takes over the treasury of the country, everything having to do with national finances, including banks.
yitbos
too big to bail
lol
Excellent!!
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