Crisis in the Eurozone: Spanish Bailout for Whom and to What End?
The leaders of the European Union have ordered the Spanish government to accept up to 100 billion Euros in loans to bail out its tail-spinning financial sector, but will this so-called "credit extension" really help pull the economy out of recession and curb soaring unemployment?
If Spain uses _all_ of the 100 Bil Euros to make their sinking banks a bit
more solvent, the answer is no.
Just like here, Spain stupidly allowed a massive real estate/construction
bubble, financed by cheap credit. and just like here, their construction
industry is more or less dead, and will remain lethargic until all of the
bad investments are unraveled.
"...arranged a series of highly favorable currency swaps for Greece, creating an immediate gain of 2.4 billion euros, which was applied against Greece's apparent debt. Normally, such a trade should have triggered a cash payment from Greece to Goldman to cover the gain. But Goldman covered that by structuring another swap, but a deferred long-term one that was off the books. The entire transaction served no purpose but to falsify Greece's books and produce fees for Goldman." That's why we don't know how much is Greece's total debt. But Goldman helped create part of it.