Catalonia asks for 5 billion bailout

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This topic contains 22 replies, has 8 voices, and was last updated by Profile photo of angie angie 4 years, 1 month ago.

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  • #57031
    Profile photo of katy
    katy
    Spectator

    Catalonia wants 5 billion with no strings attached. More money than ever left spanish banks in June. The finance minister says Spain’s economy will get worse from now until the end of the year. All here

    http://www.telegraph.co.uk/finance/debt-crisis-live/9502734/Debt-crisis-live.html

  • #111833
    Profile photo of DBMarcos99
    DBMarcos99
    Participant

    Must be a sign of the times that 5 billion doesn’t sound such a big deal! The Uk spends 20 billion+ every year on housing benefit. But you do wonder what has happened with Catalunya – it was supposed to be the economic tiger or the equivalent of the UK south-east…

    Meanwhile borrowing costs for Spain and Italy continue to dip.

    http://www.bloomberg.com/news/2012-08-28/spain-borrowing-costs-dip-at-auction-before-rajoy-rompuy-meeting.html

    Yields on Spanish and Italian bonds have plunged to three- month lows on optimism the European Central Bank and the single currency’s 17 members will agree on a plan to use short-dated sovereign debt purchases to curb governments’ borrowing costs and win them time to implement fiscal changes.

    Perhaps the markets didn’t realise Rajoy is back from his holidays 😉

  • #111837
    Profile photo of angie
    angie
    Spectator

    6.4% for Spanish 10 year Bonds might seem low compared to 7.75% but they’re still pretty high, I would think they will start rising again soon when Rajoy takes to his desk and more regions follow Catalonia, plus the Bank and business indebtedness is worsening I believe 🙄

  • #111838
    Profile photo of angie
    angie
    Spectator

    Latest news today regarding Spain apart from Catalonia’s request for 5 billion Euros, is that Spaniards (consumers and businesses) have withdrawn money from Banks at a record rate in July, deposits have shrunk 5%, as the country’s recession has deepened. 🙄

  • #111839
    Profile photo of Chopera
    Chopera
    Participant

    @dbmarcos99 wrote:

    Must be a sign of the times that 5 billion doesn’t sound such a big deal! The Uk spends 20 billion+ every year on housing benefit. But you do wonder what has happened with Catalunya – it was supposed to be the economic tiger or the equivalent of the UK south-east…

    Catalunya and Madrid are the economic tigers of Spain, together they contribute over a third of Spain’s GDP. I suspect the actual amount of money requested is secondary to the politics being played out here.

  • #111840
    Profile photo of Chopera
    Chopera
    Participant

    @angie wrote:

    Latest news today regarding Spain apart from Catalonia’s request for 5 billion Euros, is that Spaniards (consumers and businesses) have withdrawn money from Banks at a record rate in July, deposits have shrunk 5%, as the country’s recession has deepened. 🙄

    I’m trying to think of a reason not to feel extremely nervous right now.

  • #111841
    Profile photo of Anonymous
    Anonymous
    Participant

    In reality what a shrinkage of the deposits with that size means when you are using fractional reserve banking is that the ability to finance other things have gone down 90-95 times as much depending on what sorts of credits you are talking about. With the ways the banks have been faking numbers it could in reality be 200 times as much. So if customers pull one billion in deposits it means that people looking for financing gets a much harder time to find it. 90-95 billions less. Imagine how this affects the way investments are made. This will raise interest rates extremly if it’s not kept down artificially by the eurozone by pumping new money into the system.

    Understanding fractional reserve banking is a must to understand how horrible the state of the worlds economy is in at the moment.

    If Spanish banks would use true valuations on their porfolios on for example real estate it would mean ridiculous amounts of new deposits needed to ofset the drops in market value of said porfolios. This is what most people don’t understand and why it’s a pyramid scheme waiting to come down. Only way they know how to handle it is to print new money to offset this … by making the population poorer.

  • #111842
    Profile photo of Igurisu
    Igurisu
    Participant

    Regarding bank deposits, the same has been happening in Italy and Greece for some months. Basically people with savings are moving their Euros into a German bank so if the country exits the Euro their savings won’t be converted to Lira/Drachma/Peseta. In theory, the hyper inflation kicks in, currency is devalued, then they are sitting pretty on a stack of Euros that are still actually worth something on the international market.

    Not my theory I hasten to add, I don’t pretend to know about how things will pan out (I’d be a millionaire by now if I did). Just one of the main reasons for bank withdrawals.

  • #111914
    Profile photo of angie
    angie
    Spectator

    Valencia has now asked for 4.5 billion tomatoes more (nay euros) than it previously requested, this following the recent request for 5 billion euros from Catalonia to central gov’t.

    http://www.bbc.co.uk/news/business-19422198

    Think how much Valencia could have saved if it had sold those tomatoes it wastes each year 😛

  • #111915
    Profile photo of logan
    logan
    Participant

    These bail out requests are small beer. They are simple emergency loans to enable them to pay the most pressing overdue bills. The amounts they really need are in the region of €35bn. Markets won’t touch them they have nowhere else to go.
    The crunch is coming this autumn. Spain will request help just a matter of time.

  • #111916
    Profile photo of angie
    angie
    Spectator

    You’re right Logan, they are interim payment requests to see them through a few weeks more. I think Catalonia owes 42-45 Billion Euros itself 🙄

  • #111998
    Profile photo of angie
    angie
    Spectator

    Now Andalucia holds out it’s begging bowl for a 1 billion euro bailout 9 (more like advance), so the 4 regions that have asked so far probably totals over a third of the pot of 18 billion euros 🙁

    Who will be next? 🙄

  • #112004
    Profile photo of logan
    logan
    Participant

    Full EU bailout for Spain gets ever closer. They are just currently wrangling over the conditions and how much.
    http://www.telegraph.co.uk/finance/financialcrisis/9521465/Brinkmanship-as-Spain-warns-over-bail-out-terms.html
    Merkle in Madrid today to set her seal on the deal. I my view Spain will probably benefit in the long term by having none Spaniards run their economy and control the money supply.

  • #112008
    Profile photo of angie
    angie
    Spectator

    De Guindos says in the article, ‘the battle for the Euro will be fought in Spain’, Spain will be forced to comply and have non Spaniards running their economy, or they will resist and could make a Spexit. I would not bet either way, there’s national pride at stake here as well as a dire situation 🙄

  • #112010
    Profile photo of logan
    logan
    Participant

    Angie it’s posturing. Spain will capitulate in the end they will have no choice. They simply want to save face. Machismo is alive and well.
    They pontificate with meaningless gestures and political positions built on sinking sand whilst the people really struggle.

  • #112012
    Profile photo of angie
    angie
    Spectator

    Logan your post echoes more or less what I just posted on ‘Quick, Run for the Hills’, the Politicians and Government take no notice of the populus nor do they take notice of public opinion such as ‘regulate their gung-ho ridiculous property market’ and start to instill some confidence. 🙄 Something they’ve ignored for over 10 years now 😡

  • #112420
    Profile photo of angie
    angie
    Spectator

    Another Spanish Regional Government Castilla La Mancha has just applied for a bailout of 800+ million euros (not much if you say it quickly) as an interim to more later.

    Deposits with Spanish Banks also fell again in August from July’s figures as the capital flight continues:roll:

  • #112421
    Profile photo of katy
    katy
    Spectator

    Andalucía wants a 4906 million bailout, bit of a precise figure 😕

    Rajoy is late making his budget speech, suppose he can’t make up his mind on the cuts :mrgreen:

  • #112423
    Profile photo of Anonymous
    Anonymous
    Participant

    Saving face/machismo, is the theory. The reality is that it has been proved that the people in power/authority has failed y punto.

  • #112424
    Profile photo of Anonymous
    Anonymous
    Participant

    Deficit has allready passed the levels they expected in the end of december. This is not looking good for either banks or state.

  • #112425
    Profile photo of katy
    katy
    Spectator

    On the BBC website.
    Six questions for Spain

    http://www.bbc.co.uk/news/business-19711689

  • #112426
    Profile photo of angie
    angie
    Spectator

    I totally agree with all three comments below, it’s a b—-y farce if ever there was one 😆

    Either Rajoy will try and moderate the cuts slightly from originally planned, or, he will go for it and people’s anger will spread, they are probably altering things even now to try and placate things to come. It could well be yet another fudge to buy more time from the inevitable 😕

    Either way the announcement is due at 4pm UK time 🙄

    Interesting questions on that link katy, what I didn’t know though, was that Catalonia is also the grumpiest region, sounds to me like Ubeda when truth be told 😆

  • #112636
    Profile photo of angie
    angie
    Spectator

    Breaking news it seems from The Olive Press:

    Andalucia gets it’s bowl out now.

    http://www.theolivepress.es/spain-news/2012/10/08/junta-to-request-e5000-million-bailout-this-week/

    Combined regions requests now top 13 Billion Euros just to tide them over 🙄

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