A bailout in all but name

[aspasia]

It's not being called a bailout but it's difficult to see what else to call it when Spain is getting around €100 billion in favourable term loans from the Eurozone to support the country's banks. Economy minister Luis de Guindos says that the aid is for the financial system rather than the economy, and denied that it was a "rescue", but Spain's banks will now be audited to determine the exact amount of money needed.

This is not a bailout in the sense of Greece because there are no austerity measures attached, at least not beyond those already announced by Madrid. Nonetheless, the Eurozone money will go to the Government's Fund for Orderly Bank Restructuring and it will be a debt that Spain as a country owes the EU. It's difficult, as I say, to see what else to call it other than a bailout. JA

[Nova]

Ouch, that won't be good for my shares! 

[El Profesor]

This is not a bailout in the sense of Greece because there are no austerity measures attached, at least not beyond those already announced by Madrid.

There's it, deft politicianing - he did all the austerity conditions first and got the bailout as a prize -then he was able to present it as "not a bailout". The media are referring to it as a "resactillo" (baby rescate).

The problem is that all these measures are too late, if all this had been done 4 years ago there would be a very different picture now. I remember economists pulling their hair out .... Zapatero did absolutely nothing, he just let it happen.

[Janet]

Government spokesman Martín Marrero has announced today that the Canaries will be seeking €671m this year from the Fondo de Liquidez Autonómica (Regional Liquidity Fund). Sr Marrero said that the conditions attached to the bailout are more advantageous than those offered by the national bank. Moreover, they are better than the Canaries achieved with the last bailout since the interest rate is expected to be lower, at 3.9%. The loan will have a repayment term of ten years.

Sr Marrero said that last year's bailout saved the Canaries €72m in interest compared to what they would have paid the Bank of Spain, and he regretted that the islands were not allowed to apply to international banks which have lower interest rates, a prohibition which forced the regional government to apply to the Fondo rather than financing as other governments routinely do.  He reiterated that the request for funds does not indicate that the Canaries are insolvent as a region, and that, as confirmed by the Bank of Spain, the islands are in good financial health. JA

[Guanche]

Can't have it both ways. If they are in good financial health why the 'bailout'?