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Tue Jun 19, 2012, 08:16 AM

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?

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Reply Crisis in the Eurozone: Spanish Bailout for Whom and to What End? (Original post)
Lars77 Jun 2012 OP
Iggy Jun 2012 #1
ancianita Jun 2012 #2
nineteen50 Jun 2012 #3

Response to Lars77 (Original post)

Tue Jun 19, 2012, 09:17 AM

1. Answer: NO

 

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.

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Response to Lars77 (Original post)

Tue Jun 19, 2012, 10:03 AM

2. Goldman Sachs...

"...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.

from Predator Nation by Charles H. Ferguson

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Response to Lars77 (Original post)

Tue Jun 19, 2012, 11:40 AM

3. They understand this is about bailing out those who created the problem

a huge transfer of private debt to public debt. Socializing private loses. Neo-liberalism has failed and they want the public sector to save their asses.

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