Cyprus is the latest European nation to be on the verge of receiving an EU bailout.
Finance ministers from EU countries are meeting today to discuss a $22 billion (U.S.) bailout of the island nation. Germany is resisting and insisting that those who have deposits in Cyprus banks pay for the rescue calling it a “bail-in”. Continue reading
In a major blow to Spain’s economy, ratings group Standard & Poor’s lowered the country’s credit rating to BBB-, one level above junk status, warning that other downgrades were possible.
The country is expected to be asking for a bailout in the midst of drastic spending cuts, tax increases and youth unemployment over 50%. Continue reading
The European Union has launched a new permanent fund whose sole purpose is bailing out endangered economies.
The European Stability Mechanism (ESM) will have the ability to lend a nation up to 500 billion euros ($650 billion U.S.) starting in 2014. The ESM will phase out the European Financial Stability Facility. The group will be headed by the Prime Minister of Luxembourg. Continue reading
The second biggest lender in Spain is reporting that it could take up to 60 billion euros ($78 billion US) to bail out the country’s banks.
The results of independent stress tests of the Spanish banking system aren’t due to be released until September 28th but BBVA apparently obtained access to the information in advance. Continue reading
Spanish Prime Minister Mariano Rajoy has stated that he will not accept any outside conditions on bailout funds that could potentially save his nation’s economy.
“I am absolutely convinced that everyone will be reasonable but I insist that we haven’t taken a decision,” Rajoy said during a national television address. “I will look at the conditions. I would not like, and I could not accept, being told which were the concrete policies where we had to cut.” Continue reading
Catalonia, a region of Spain that makes up one-fifth of the nation’s economy, is requesting a new bailout of 5 billion euros to cover debts.
The news comes as Spain’s economy shrank even further according to official data from the second quarter of the year. The nation’s economy fell about .4% after the economy fell .3% in the first quarter of the year. It’s the third straight quarter where the economy has shrunk and the overall annual contraction in the second quarter on an annual basis is 1.3%. Continue reading
The leaders of the European Union have agreed to a deal that would allow bailout funds to go directly to struggling banks instead of the governments of member nations.
They also created a joint banking supervisory board after meeting for 13 hours. Continue reading
Ratings firm Finch has cut the rating of the country of Cyprus to junk status. The cut is believed to be in response to Cyprus banks holding much of the real estate debt of Greece.
Fitch states that Cyprus will need at least 4 billion euros to support its banks on top of 1.8 billion euros needed to recapitalize its lender Cyprus Popular Bank. The bank needs and the junk rating will make it almost impossible for the country to borrow from international markets. Continue reading
Spain finally made a formal request for euro zone rescue loans to bail out banks overwhelmed with bad debts on Monday. The euro and bank shares fell mainly on speculation that the European Union summit this week will not act decisively on the crisis.
Spanish Economy Minister Luis de Guindos requested 100 billion euros in a letter sent to the Euro group chairman. The final amount of assistance could be less than the requested total. Continue reading
Spain’s economic woes took another hit when credit agency Moody’s cut the country’s bond rating three notches to Baa3. The rating is just one notch above classifying Spanish bonds as “junk bonds.”
The credit dip was attributed directly to the country’s 100 billion euro bailout from fellow euro zone countries that was approved over the weekend. Lenders have been stating concern for Spain’s future in the euro zone as a result of their continuing banking woes. Continue reading
