Spanish Banking Woes - Eurozone Crisis

Daily Mail: Reports that there are worries that other Spanish Banks beyond Bankia will need to be bailed out.

Lets Get Real:

The EU has to demand that Spain takes a bailout, that EU/IMF/ECB Inspectors are placed in Spanish Government Departments, that Regional Governments in Spain must have their budgets approved by the Centre. The reforms of the new Spanish Government have to be pushed through, the level of unemployment in Spain at the of the end of the day could lead to civic disorder, also we might see millions of Spanish and Greek youngsters leave their Countries head to France Germany or the UK, the aim to get a job. This would place extra burden on these Countries, from welfare to anger by local that EU Citizens are taking jobs at a cheaper rate. Thus the Spanish problem has to be solved and fast, Greece is a lot cause, the EU might not have the money to bailout out Spain, a sinking Spain might take Italy with it, then the Euro would be finished and the EU would not be far behind.

The Greek Election and Polls

Guardian Live - Greece: Reports the following in its 4.01pm post on Greek opinion polls, “ ..support for the 'anti-bailout' Syriza party holding up well, are the trigger that sent the euro falling. ”.

Lets Get Real:

Thus folks we have a couple of weeks of this kind of up and downs in the stock and currency markets. As noted in my last post the big private sector companies seem to have taken the hint and getting out of any risks. IF the Greeks jump off a cliff this would be the best news for the Euro, at least then the EU can soften the blow for the Greeks, it can give them a bailout to help keep the civic order in Greece, also help Greece bring back its own currency. It will be a fresh start for the Greeks, they can develop a Greek economic system that will allow Greece in a few years time to come back in to the international market. If Greece does go it will be harsh folks, lets not sugar coat that fact, the alternative would have Greece suffering for years for nothing, is that fair to the Greek people, they did give the world Democracy.

The Real Market and Greece

Telegraph Live - Greece: Reports in its 2.04pm post the following, “ Euler Hermes, the world's biggest trade insurer, has suspended cover for exporters shipping to Greece ..”, on the fear that Greece will not be able to pay its debts should it either leave the Euro or be forced out.

Lets Get Real:

If the big private companies fear that Greece is going belly up its time for the banks to off load their Greek debt, also invoke their insurance policies. The June 17th election in Greece might not be that clear cut, as noted in its 3.30pm post recent Greek Polls indicate that “ it's probably split 50:50 over who will win - anti-bailout Syriza and New Democracy. ”. Thus if Greece is seen as goner in the private sector, one has to ask how fast that end will hit Spain. The French and the Spanish want Euro Bonds as to help with Euro debt, the Germans have said NO. Thus we might be seeing the start of the end of the Euro folks, the German taxpayer is not going to bailout Greece and Spain, it will not pay for French election promises, thus rough seas ahead folks for Euro and the EU.

Spanish Bonds vs. Germans Bonds = Eurozone Crisis

BBC News: Reports that EU Stock Markets have taken a dive of between 1% - 1.5% over the cost Spanish bonds heading up to 6.7%, while Germans bonds have fallen to 1.31%.

Lets Get Real:

If Spanish bonds head over 7% the Markets will expect Spain to ask for multi billion bailout, that would include Spanish Government debt, the debts of its banks, and the debts of its regional Governments. Yes folks we might be talking about a bailout of between half a trillion to 1 trillion in Euros. This is before Greece goes to the Polls on June 17th. The worry for the Germans is that the Greeks might be so spooked that they support austerity Parties for a time thus Germany and the EU would have to fund Greece, but down the line the Greeks just get fed up and refuse the pay. Thus more Euro billions down the toilet. One can expect the Germans to demand should the Greeks elect a Coalition Government that supports austerity to make legally binding deal, a deal that will make the Austro - Hungarian demand to the Serbs in 1914 look like a birthday card. In other words Athens would come under the control of Berlin, if they want the money from Berlin they would have to follow the demands of 4th economic Reich.