http://www.businessspectator.com.au/...Y?OpenDocument
Quote:
Just like Greece, Spain enjoyed much lower interest rates under the euro than under its old national currency. But whereas in Greece the lower interest rates were taken as an opportunity to incur greater public deficits, in Spain it was the private sector which accepted the invitation to go deeper into debt.
(...)
In all likelihood, Spain’s banks will need to be recapitalised out of the trillion dollar fund the EU agreed on in May. This would only confirm what many observers had suspected from the beginning – the EU measure is first and foremost a bank bailout, not a vehicle to save the euro.
Whether this enormous amount of capital will be sufficient is questionable. Last week, EU president Herman van Rompuy indicated that the initial stabilisation package may need to be extended – before the first euros out of this package have actually been paid.
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The ordinary man on the street knew it. Every normal citizen saw it coming. Just politicians soon will start to claim that they could not have known anything, and that the monetary union is great, and that this is not the time to point fingers, and that they are very optimistic about the future. And blah and blah and blah blah blah, and babalabah.
Who gets the lion's share of the bill? The Germans, as usual. Who else.