Full-scale Spanish bailout almost inevitable |
| Financial Post - Jun 14, 2012 |
Spain will have to play the right cards at the right time to shore up confidence and avoid sliding towards a full-scale sovereign bailout despite negotiating European financial assistance of up to 100-billion euros for its banks.
The country’s struggle to meet its deficit goal for 2012, the risk that the banking sector clean-up moves too slowly and the need to tap the debt market for another 100-billion euros (US$125-billion) this year puts Spain just a few steps away from needing more external help, sources and analysts say.
‘The sovereign itself may yet need to request a bailout of its own at a later stage’
Centre-right Prime Minister Mariano Rajoy has some room for maneuver even as he calls on the eurozone for immediate and medium-term measures to help restore credibility.
Despite its treasury minister declaring the bond market was closing to it, Spain has a strong liquidity position which will enable it to meet its debt obligations for at least another few months, and it has room to boost revenues by raising value-added tax or energy taxes.
Read Full Article from Financial Post
- Posted: 2012-06-14 14:26:44
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