Lovely: Spain now looking for a $125 billion bailout

posted at 5:01 pm on June 9, 2012 by Erika Johnsen

Friday, the International Monetary Fund informed the world that, in their estimation, Spain is in need of a bailout of ’round about $50 billion to rescue their banking system and save the country from financial disaster. Today, we learned that the real situation is, in fact, much worse than the original estimate, and that Spain would actually prefer an aid package closer to about $125 billion. Well, fancy that — who could’ve seen that one coming?

Spain is about to become the largest euro economy to seek a bailout (theirs is about the fourth largest economy in the eurozone), following in the bailout-requesting footsteps of Greece, Ireland, and Portugal. This latest request will add to the $480 billion the IMF and European governments have already promised to those three countries.

“The Spanish government declares its intention of seeking European financing for the recapitalization of the Spanish banks that need it,” Spanish Economy Minister Luis de Guindos told reporters in Madrid today. A statement by euro region finance ministers said the loan amount will “cover estimated capital requirements with an additional safety margin.”

Just seven months after winning a landslide victory, Prime Minister Mariano Rajoy was forced to abandon his bid to recapitalize Spanish banks without recourse to external help as a deepening recession forced lenders to recognize spiraling losses. Today’s move means Spain has a firewall in case the Greek election on June 17 unleashes a fresh round of market turmoil. …

The eurogroup statement said that the formal request will come “shortly.” An assessment will then be provided by the European Commission, which will liaise with the European Central Bank, the European Banking Authority and the IMF. There will also be a proposal for “the necessary policy conditionality” that will accompany the assistance.

The “necessary policy conditionality,” presumably, meaning that Spain will have to promise to tighten up its budgetary screws before they get the dinero (of course, Greece promised they’d add a little austerity to their lives, too, and they’re still not doing too hot, so…).

Spain has an unemployment rate of over 24 percent — the highest in the industrialized world right now — but to listen to President Obama and his Keynesian ilk, it’s because of all this ‘draconian’ ‘austerity’ spreading like a contagion across the eurozone. More stimulus!, they insist, as the solution to all of these fiscal woes. Except, where is all of this free money supposed to come from, exactly?

And, hey, let’s take a look at where we are after we spent a boatload of cash to bail out and stimulate a bunch of our major industries in 2009: sittin’ pretty with a whole lot of “too big to fail” banks, stagnant economic growth, continually poor work participation rates, and a three-year non-recovery. Yeah, let’s do more of that.


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125 billion ? Chump change. We got that in the Oval Office couch.

teacherman on June 9, 2012 at 5:10 PM

But at least they have the greatest sports team of all time. So they’ve got that going for them.

Flange on June 9, 2012 at 5:15 PM

Fox reported at the top of the hour that the Eurozone is giving Spain a bailout, though the Spaniards aren’t referring to it as a bailout.

It’s a pride thang. They’re proud of living off others.

madmonkphotog on June 9, 2012 at 5:16 PM

“When it becomes serious, you have to lie”, Jean-Claude Juncker

I doubt it will stop at 125 billions. Greece costed the ECB 1 trillion Euro and it still failed. Spain is 100 time worst than Greece. Good luck in bailing them out.

jdun on June 9, 2012 at 5:16 PM

Thanks, Spain, for asking How High? when Al Qaeda told you to jump and you elected the Socialist Workers Party in. Good job.

thebrokenrattle on June 9, 2012 at 5:16 PM

where is all of this free money supposed to come from, exactly

From the land of free-range, rainbow-colored, carbon-free unicorns.

GarandFan on June 9, 2012 at 5:18 PM

Spain has been going into economic and moral decay ever since Generalissimo Francisco Franco died, and left the place to Juan Carlos and the liberals and leftists..

THUMBS DOWN ON THE BAILOUT AMIGOS !!

BigSven on June 9, 2012 at 5:22 PM

where is all of this free money supposed to come from, exactly

ECB printing press and German tax payers.

jdun on June 9, 2012 at 5:24 PM

so when actually do they run out of other peoples money ?

conservative tarheel on June 9, 2012 at 5:25 PM

Spain now looking for a $125 billion bailout

This is what “green economy” really means.

BobMbx on June 9, 2012 at 5:25 PM

Spain to seek bailout from eurozone…investment morons will certainly drive up the equity markets on Monday, since they like nothing more than when BILLIONS AND BILLIONS of taxpayer dollars (or freshly printed central bank money) is used to bailout banks and other humongous profit makers. These morons are the most short-sighted, greedy, self-serving reprobates on Earth. (Gee, that makes them exactly like politicians, now doesn’t it !)

TeaPartyNation on June 9, 2012 at 5:26 PM

€100 billion? Es todo? Spain’s gonna need more than that.

Make it a trillion. Then we can hablar.

spiritof61 on June 9, 2012 at 5:26 PM

Don’t worry Dear Leader will be the first to step up to the plate with our hard earned money.

jeffinsjvca on June 9, 2012 at 5:27 PM

Sorry, I’m all tapped out.

Cindy Munford on June 9, 2012 at 5:28 PM

Utopia!!!!!!

Pssst watch all of it.

CW on June 9, 2012 at 5:30 PM

How did people ever get along before they had government to provide everything? Oh, yeah…they raised children, educated those children (so they could be independent,) and saved money for a rainy day.

RBMN on June 9, 2012 at 5:34 PM

And when you think how enthusiastically Barkey was praising Spain and presenting it as a model to emulate not long ago…what happened to their super duper green policies and green jobs ‘created’ now that Spain’s unemployment is at 27%…

jimver on June 9, 2012 at 5:40 PM

This is stupid. The Socialists saved Spain in 2006.

/

mankai on June 9, 2012 at 5:42 PM

Spain, you might want to start skipping the whole afternoon nap thing and get busy creating some wealth. Or fail, frankly I don’t care anymore.

Bmore on June 9, 2012 at 5:49 PM

print euros.

gerrym51 on June 9, 2012 at 5:51 PM

Dear Spain..start selling some of that delicious wind power and GFY..

BigWyo on June 9, 2012 at 5:52 PM

Maybe California can join the Eurozone. Gov. Moonbeam would be giddy with joy.

Philly on June 9, 2012 at 5:52 PM

Ask Germany for the dough….they’re perfect.

CW on June 9, 2012 at 5:54 PM

Dare I ask, what is the retirement age in Spain? For dangerous professions like hairdressing?

slickwillie2001 on June 9, 2012 at 5:56 PM

Sell some El Grecos.

profitsbeard on June 9, 2012 at 5:58 PM

The “necessary policy conditionality,” presumably, meaning that Spain will have to promise to tighten up its budgetary screws before they get the dinero

Nope.

It’s going to be a direct bank bailout. Hence no austerity conditions attached for the government (Spain’s central government public debt is actually fairly low – 70% of the GDP. Obviously, it’d balloon if they were forced to bailout the banks).

They played this smarter than the Irish.

joana on June 9, 2012 at 5:59 PM

Looks like we have a winner in the alternate energy Race to the Bottom. The highest unemployment rate in Europe corresponds with the nation’s level of enthusiasm for pipe-dream energy. Not surprisingly the two states with the highest unemployment also have a fetish for unicorns. I know Californians are beyond hope, but what’s wrong with Nevada?:

http://fiscalwars.wordpress.com/2012/05/26/whats-wrong-with-nevada/

stout77 on June 9, 2012 at 6:00 PM

Thanks, Spain, for asking How High? when Al Qaeda told you to jump and you elected the Socialist Workers Party in. Good job.

thebrokenrattle on June 9, 2012 at 5:16 PM

This is the conservative government, dude.

Zapatero is gone and Rajoy is trying to clean up his mess. Unfortunately, the presence of the single currency limits the options of governments trying to get out of debt. At least Rajoy has enough of a majority in the Spanish Parliament to make cuts when he needs them, unlike France or Greece.

fiatboomer on June 9, 2012 at 6:01 PM

Were they hit by a meteor? A tidal wave?

No. They just spent the last 30 years in a wildly irresponsible spending spree. Which they have absolutely no plans whatsoever to do anything about in the foreseeable future except increase geometrically.

What kind of raving lunatic would lend them a single penny?

logis on June 9, 2012 at 6:03 PM

Dare I ask, what is the retirement age in Spain? For dangerous professions like hairdressing?

slickwillie2001 on June 9, 2012 at 5:56 PM

67 years old.

Spain’s situation is a bit different than Greece’s – albeit the underlying theme is the same: belonging to a currency zone that doesn’t fit them which leads to bubbles in the non-transactionable goods sector.

Spain had The Mother of All Housing Bubbles‎. Once it burst, they were left with a 25% unemployment rate and uncapitalized and underfunded banks.

joana on June 9, 2012 at 6:05 PM

At this rate, we may see another world war break out in less than a generation. Europe is going to collapse. Again.

KMC1 on June 9, 2012 at 6:06 PM

ERIKA:
It takes a very special writing talent to be able to present such a grim picture as the economic catastrophe that is unfolding in the EU, particularly in the Eurozone, and still evoke a smile. Thanks.

thatsafactjack on June 9, 2012 at 6:06 PM

Fools will be fools.

Schadenfreude on June 9, 2012 at 6:12 PM

Has the Spanish government accepted the condition of the “austerity” measures?

Last I read they had not. No one should bail them out. They will not behave responsibly until they hit rock bottom. They are addicts for other people’s money.

dogsoldier on June 9, 2012 at 6:13 PM

I can see it now…

“Here is the money…

… but you will now have to fly our flag!”

Seven Percent Solution on June 9, 2012 at 6:14 PM

Were they hit by a meteor? A tidal wave?

No. They just spent the last 30 years in a wildly irresponsible spending spree. Which they have absolutely no plans whatsoever to do anything about in the foreseeable future except increase geometrically.

What kind of raving lunatic would lend them a single penny?

logis on June 9, 2012 at 6:03 PM


They were HIT by a collapse in housing prices … where have we seen this before … ????

Not a WILDLY irresponsible spending spree – their debt to GDP ratio without this bailout is better than OURS.

Time to set aside ideology and THINK THIS THROUGH people.

“Scorecard, get your scorecard! You can’t tell which country will crumble next without your scorecard!”

(Psssst, insider tip – Spain was just given a MUCH better deal than Greece because their starting position was ‘give us the money with no strings attached or we leave the EU/euro’. What lesson can the Greeks and the Irish [who surrendered $ 88 billion USD in pensions] learn from the Spanish?)

PolAgnostic on June 9, 2012 at 6:23 PM

I’m so tired of the Left claiming that “austerity” means draconian spending cuts. In Europe for the most part, IT DOES NOT. Spending increased in 23 of 27 countries last year and 24 of 27 will increase spending even more this year. Yes, spending has been cut in Greece and Spain, BUT THAT IS WHAT HAPPENS WHEN YOU RUN OUT OF OTHER PEOPLE’S MONEY — THE “OTHER PEOPLE” BEING THE MIDDLE CLASS AND RICH IN YOUR OWN COUNTRY. Now, they are having to go hat-in-hand to the bankers, who are really running things, for bailouts and they’re surprised(!) that the money comes with strings attached.

“Austerity” in Europe has overwhelmingly meant TAX INCREASES, which is exactly what Obama and the Democrats want to do here.

The UK recently fell back into recession and the Left in the US screamed that it was all the result of “austerity” — meaning massive spending cuts. Balderdash! The spending cuts have been postponed. The Coalition (Tories & LibDems) has actually spent more money than even the hellacious 13 years of Labour that bankrupted the country.

Just as the housing market didn’t have anything to do with the financial crisis in 2008, which was really caused by the Bush tax cuts, spending cuts that are scheduled to take place YEARS from now are responsible for the recessionary conditions while the various and burdensome tax rises on everything from income to fuel have played no role whatsoever…that is, if you listen to the Left here and there and live in My Progressive Little Ponyland.

Resist We Much on June 9, 2012 at 6:26 PM

Lovely: Spain now looking for a $125 billion bailout

……and the righties continue bi$ch#ing. What else is new?

loveofcountry on June 9, 2012 at 6:27 PM

Has the Spanish government accepted the condition of the “austerity” measures?

Last I read they had not. No one should bail them out. They will not behave responsibly until they hit rock bottom. They are addicts for other people’s money.

dogsoldier on June 9, 2012 at 6:13 PM

There are no conditions.

The Spanish government isn’t being bailed out. Again, Spain’s public debt is one of the lowest in the Western World. Obviously this is tricky, but allows them to bailout the Spanish banks without imposing an “austerity” package on the Spanish government.

joana on June 9, 2012 at 6:27 PM

At this rate, we may see another world war break out in less than a generation. Europe is going to collapse. Again.

KMC1 on June 9, 2012 at 6:06 PM

Well if by generation you mean 2 – 3 years …

TEOTWAWKI

PolAgnostic on June 9, 2012 at 6:29 PM

(Psssst, insider tip – Spain was just given a MUCH better deal than Greece because their starting position was ‘give us the money with no strings attached or we leave the EU/euro’. What lesson can the Greeks and the Irish [who surrendered $ 88 billion USD in pensions] learn from the Spanish?)

PolAgnostic on June 9, 2012 at 6:23 PM

That life is unfair?

Spain had leverage because their economy is the 5th biggest in Europe and if Spanish banks went down the entire European – and world – economy would collapse.

Much easier to play hardball when you’re one of the biggest kids in the block.

joana on June 9, 2012 at 6:32 PM

Read the part in EMPHASIZED and write it on the whiteboard 1,000 times if that is what it takes for you to remember to TELL EVERYONE YOU KNOW THE TRUTH

I’m so tired of the Left claiming that “austerity” means draconian spending cuts. In Europe for the most part, IT DOES NOT. Spending increased in 23 of 27 countries last year and 24 of 27 will increase spending even more this year. Yes, spending has been cut in Greece and Spain, BUT THAT IS WHAT HAPPENS WHEN YOU RUN OUT OF OTHER PEOPLE’S MONEY — THE “OTHER PEOPLE” BEING THE MIDDLE CLASS AND RICH IN YOUR OWN COUNTRY. Now, they are having to go hat-in-hand to the bankers, who are really running things, for bailouts and they’re surprised(!) that the money comes with strings attached.

“Austerity” in Europe has overwhelmingly meant TAX INCREASES, which is exactly what Obama and the Democrats want to do here.

The UK recently fell back into recession and the Left in the US screamed that it was all the result of “austerity” — meaning massive spending cuts. Balderdash! The spending cuts have been postponed. The Coalition (Tories & LibDems) has actually spent more money than even the hellacious 13 years of Labour that bankrupted the country.
*snip*

Resist We Much on June 9, 2012 at 6:26 PM


RWM – excellent post!

PolAgnostic on June 9, 2012 at 6:35 PM

Spain had leverage because their economy is the 5th biggest in Europe and if Spanish banks went down the entire European – and world – economy would collapse.

Much easier to play hardball when you’re one of the biggest kids in the block.

joana on June 9, 2012 at 6:32 PM

They will fail anyway.

http://www.zerohedge.com/news/spain-greece-after-all-here-are-main-outstanding-items

and

http://www.zerohedge.com/news/spain-ultimate-doomsday-presentation

dogsoldier on June 9, 2012 at 6:40 PM

RWM – excellent post!

PolAgnostic on June 9, 2012 at 6:35 PM

Thanks.

If anyone is interested in learning the truth, here are some posts from my blog on the subject…with music, of course:

Europe, How Can You Have Any Pudding If You Don’t Eat Yer Meat?

http://predicthistunpredictpast.blogspot.com/2012/05/europe-how-can-you-have-any-pudding-if.html

M2RB: Pink Floyd

This Is The Dawning Of The Age Of “Austerity”?

http://predicthistunpredictpast.blogspot.com/2012/05/this-is-dawning-of-age-of-austerity.html

M2RB: Hair

In The UK, “Austerity” Means Spending More Than The Socialists In Labour Did…And, Those Bastards Bankrupted The Country

http://predicthistunpredictpast.blogspot.com/2012/05/in-uk-austerity-means-spending-more.html

M2RB: Pearl Jam

The Debate Over Austerity Continues

http://predicthistunpredictpast.blogspot.com/2012/05/debate-over-austerity-continues.html

M2RB: Pink Floyd

Resist We Much on June 9, 2012 at 6:46 PM

RWM – excellent post!

PolAgnostic on June 9, 2012 at 6:35 PM

Thanks.

If anyone is interested in learning the truth, here are some posts from my blog on the subject…with music, of course:

Europe, How Can You Have Any Pudding If You Don’t Eat Yer Meat?

http://predicthistunpredictpast.blogspot.com/2012/05/europe-how-can-you-have-any-pudding-if.html

M2RB: Pink Floyd

This Is The Dawning Of The Age Of “Austerity”?

http://predicthistunpredictpast.blogspot.com/2012/05/this-is-dawning-of-age-of-austerity.html

M2RB: Hair

Resist We Much on June 9, 2012 at 6:47 PM

They will fail anyway.

http://www.zerohedge.com/news/spain-greece-after-all-here-are-main-outstanding-items

and

http://www.zerohedge.com/news/spain-ultimate-doomsday-presentation

dogsoldier on June 9, 2012 at 6:40 PM

Oh, I agree. They’re just buying time. There’s a time-bomb of bad debt that eventually needs to be written off. But governments will just keep protecting the bank shareholders for as long as they can.

joana on June 9, 2012 at 6:48 PM

That life is unfair?

Spain had leverage because their economy is the 5th biggest in Europe and if Spanish banks went down the entire European – and world – economy would collapse.

Much easier to play hardball when you’re one of the biggest kids in the block.

joana on June 9, 2012 at 6:32 PM


Just a hunch, but when parents in Greece are giving their young children up for adoption outside of Greece so those children can have a better life, I think they already know life is unfair …

If you have spent time in Europe, you know there are 2,000+ years of prejudices and resentments between virtually all the countries … and in some cases like France – between the North and the South of the country.

The TWO World Wars started in Europe. Inequitable results are a fact of life. People pushed too far collapsing goverments are too.

WHEN the EU/euro capsizes and breaks apart – NO ONE is going to like the results.

And we are now on the WHEN not IF path ……….. and the POTUS is a SCOAMF

PolAgnostic on June 9, 2012 at 6:48 PM

Two more:

In The UK, “Austerity” Means Spending More Than The Socialists In Labour Did…And, Those Bastards Bankrupted The Country

http://predicthistunpredictpast.blogspot.com/2012/05/in-uk-austerity-means-spending-more.html

M2RB: Pearl Jam

The Debate Over Austerity Continues

http://predicthistunpredictpast.blogspot.com/2012/05/debate-over-austerity-continues.html

M2RB: Pink Floyd

They all have the numbers, graphs, etc.

Resist We Much on June 9, 2012 at 6:49 PM

Remember when American conservatives were thrilled when this guy got elected PM? Hahahahah….

Ostrich Egg on June 9, 2012 at 6:49 PM

Oh, I agree. They’re just buying time. There’s a time-bomb of bad debt that eventually needs to be written off. But governments will just keep protecting the bank shareholders for as long as they can.

joana on June 9, 2012 at 6:48 PM

What happens when the debt is written off?

Any clue?

Hmmmm?

PolAgnostic on June 9, 2012 at 6:50 PM

At this rate, we may see another world war break out in less than a generation. Europe is going to collapse. Again.

KMC1 on June 9, 2012 at 6:06 PM

Well if by generation you mean 2 – 3 years …

TEOTWAWKI

PolAgnostic on June 9, 2012 at 6:29 PM

What group of countries against what group of countries?

Isn’t something like a dozen simultaneous c-wars more likely?

slickwillie2001 on June 9, 2012 at 6:58 PM

The Socialist Party and his leader Jose Luis Rodriguez Zapatero destroy the spanish economy and the crisis is too deep now; there’s little that Mariano Rajoy and the Popular Party can do to fix the economy.

Falz on June 9, 2012 at 6:59 PM

Oh, I agree. They’re just buying time. There’s a time-bomb of bad debt that eventually needs to be written off. But governments will just keep protecting the bank shareholders for as long as they can.

joana on June 9, 2012 at 6:48 PM

Their ongoing real debt is 90% of their GDP. The problem in reality is their socialist government. They will burn through this cash in no time, especially with the bank deposits fleeing the country.

They cannot just write off the debt. If they do, the German people will drag Merkel out of office.

Greece and Italy will now demand unconditional bail outs too.

There will be no “soft landing.”

dogsoldier on June 9, 2012 at 7:01 PM

How did people ever get along before they had government to provide everything? Oh, yeah…they raised children, educated those children (so they could be independent,) and saved money for a rainy day.

RBMN on June 9, 2012 at 5:34 PM

You know, they also started work at a younger age-16 or 18- and worked until they couldn’t work any longer or had enough of their own money to retire. Now that people retire at 65 or 67 or as France now proposes-60- and live for 20-30 years on government pensions, while getting government provided health care it’s hardly surprising that most Western governments are getting in trouble.

If we don’t correct our spending problem, we’ll be seeing Chinese Social Security-move in with your kids- and Chinese Medicare-get all your cash go to the hospital-have the doctor giveyou the options with pricing, see what you can afford.

talkingpoints on June 9, 2012 at 7:01 PM

What happens when the debt is written off?

Any clue?

Hmmmm?

PolAgnostic on June 9, 2012 at 6:50 PM

People take losses. Banks will become insolvent or lose their capital. Shareholders will go down. Governments will default. Bondholders will lose money. Even depositors will need to share the pain. Businesses will go bankrupt and jobs will be lost. The human pain will be immense. However it needs to be done. We wont’ see any sort of healthy economic growth till it happens. Right now we’re spending absurd amounts of wealth to keep banks and governments and failed businesses floating. Bankruptcies are at an incredibly low level for the economic fundamentals, no bank ever becomes insolvent and mortgage forebeances are endemic because of the political decision that we need to avoid the pain at all costs.

joana on June 9, 2012 at 7:01 PM

Spain is in need of a bailout of ’round about $50 billion to rescue their banking system

And all I need is $50k.

It will take me a couple-three years to EARN it.

davidk on June 9, 2012 at 7:06 PM

Their ongoing real debt is 90% of their GDP. The problem in reality is their socialist government. They will burn through this cash in no time, especially with the bank deposits fleeing the country.

They cannot just write off the debt. If they do, the German people will drag Merkel out of office.

Greece and Italy will now demand unconditional bail outs too.

There will be no “soft landing.”

dogsoldier on June 9, 2012 at 7:01 PM

90%? If your including their liabilities in the European mechanisms it’s even higher. That’s not relevant though. Ceteris paribus, if the Spanish banks were capitalized, this bailout wouldn’t need to exist.

The debt needs to be written off. Lenders and banking shareholders need to be wiped out if necessary. That’s how it’s supposed to work. You make bad loans, you pay the price. What we have now is governments stepping up to avoid that process – leading to capital being assigned to malinvestments. When you suck wealth trying to hide bad debts don’t expect the economic growth to ever improve from mediocre.

joana on June 9, 2012 at 7:09 PM

you’re*

joana on June 9, 2012 at 7:10 PM

Why is there always faux surprise from the HA staff writers over these predictable and forecasted events? This has been known for years.

NEWS FLASH: The Sun will rise in the East tomorrow. FILM @ 11:00

DevilsPrinciple on June 9, 2012 at 7:20 PM

Same song from Spain to the Motor City….

Detroit: Here’s Where The Story Ends

http://predicthistunpredictpast.blogspot.com/2012/06/detroit-heres-where-story-ends.html

M2RB: The Sundays

Resist We Much on June 9, 2012 at 7:25 PM

The IMF is mentioned – are they looking for a “loan” from the IMF? Which means our tax dollars are going to pay the feckless Spanish? Jesus, it’s time to arm up. The US Government needs to veto any IMF loan and tell the Spanish to leave the Eurozone.

Over50 on June 9, 2012 at 7:26 PM

Obama: Let me be clear, Spain’s economy is doing fine

Moesart on June 9, 2012 at 7:30 PM

France is next.

BigGator5 on June 9, 2012 at 7:37 PM

Why is there always faux surprise from the HA staff writers over these predictable and forecasted events? This has been known for years.

NEWS FLASH: The Sun will rise in the East tomorrow. FILM @ 11:00

DevilsPrinciple on June 9, 2012 at 7:20 PM

Just playing our part in the Obama Kubuki Theater.

BobMbx on June 9, 2012 at 7:40 PM

They cannot just write off the debt. If they do, the German people will drag Merkel out of office.

dogsoldier on June 9, 2012 at 7:01 PM

She couldn’t even if she wanted. There was a Supreme Court ruling last year that made it very clear that she lacks the authority to agree to any more bailouts or large-scale financial transfers on her own.

The German people have had it. In Germany, the retirement age is 67 and retirees receive 46% of their final salaries as a pension. In Greece, men can retire at 55 and women at 50…unless they work in arduous and dangerous professions like television presenting, hairdressing or radio announcing, then they can retire at 45. Retirees receive 97% of their final salaries. What have they received in return? The Greeks played the Nazi card.

If there is one good thing that has come out of this, the Germans have begun to show a little backbone. For decades, they’ve been guilted into agreeing to things or accommodating small EU countries because of the World Wars. They had major self-inflicted guilt trips and many young Germans left the country to work elsewhere where they would not feel the dark shadow of the past as much. Obviously, the Nazis were beyond horrible. Members of my own family were killed by them, but I don’t hold the Germans of today responsible for the sins of their grandfathers.

As I said recently here, Germany could be used as a teaching aid to show how to breed self-respect out of a population…from Prussification to Pussification in less than a century.

I wouldn’t want Germans to revert back to the old militarism of the Prussians and Nazis, but I would like to see the Germans grow some balls and stop backing down whenever their profligate neighbours make demands and threats. This crisis has demonstrated that there might just be a flicker of fight left in the German people. I hope so.

Resist We Much on June 9, 2012 at 7:42 PM

Much easier to play hardball when you’re one of the biggest kids in the block.

joana on June 9, 2012 at 6:32 PM

So who will bail out the US? How do we play hardball?

BobMbx on June 9, 2012 at 7:42 PM

Resist We Much on June 9, 2012 at 6:47 PM

Like your taking on “Astarity” in Europe.

Can not wait for Mitts plan to actually have real cuts in spending here.

This was actually more caused by their Green Energy programs than housing. In Spain two jobs were lost permanently for every one temporary “Green” job.

I would bet that here in America at least five million of the 25 million unemployed are due in great part to the Green Energy policy of Obama jacking up the price of all energy sky high.

Steveangell on June 9, 2012 at 7:47 PM

Resist We Much on June 9, 2012 at 6:47 PM

Your understanding of Europe is amazing.

Steveangell on June 9, 2012 at 7:50 PM

Rand Paul for VP. dont take my money and give it to Spain.

newportmike on June 9, 2012 at 7:50 PM

What group of countries against what group of countries?

Isn’t something like a dozen simultaneous c-wars more likely?

slickwillie2001 on June 9, 2012 at 6:58 PM


List the European countries with nuclear arsenals that don’t like each other all that much.

Mix in the loss of the euro and the resultant overnight impoverishment of 350+ million people who think life owes them a nice retirement

Add Russia (a mafia state), China (where corruption is SO rampant they have just instituted new controls to keep members of the Communist establishment from leaving the country OR moving their ill gotten goods outside of China), Pakistan, India, and North Korea to spice it all up.

Make your Global Thermonuclear War fantasy draft picks and have at it.

FYI, the cyberwars have been going on for the last 8+ years. China’s massive ‘root kit’ invasion was a stunning success.

PolAgnostic on June 9, 2012 at 7:53 PM

Make your Global Thermonuclear War fantasy draft picks and have at it.

FYI, the cyberwars have been going on for the last 8+ years. China’s massive ‘root kit’ invasion was a stunning success.

PolAgnostic on June 9, 2012 at 7:53 PM

Doubt this will end that way.

I would think it would be more likely for the Muslim States to unite. They have a lot of Oil money and Oil Europe could use. They could then mussel Europe to unite with them as well perhaps China and Russia as well. Remember most of Africa is Muslim States.

That would leave us out in the Cold more or less.

As long as we are playing silly games.

Steveangell on June 9, 2012 at 8:06 PM

Your understanding of Europe is amazing.

Steveangell on June 9, 2012 at 7:50 PM

I am British by birth and hop the pond every 6-8 weeks or so. What’s happening in Europe has been building for decades and was always inevitable. It just took the world financial crisis to either expose or accelerate it. I call the problem “suicide by demographics.”

A country simply cannot have a welfare state when it does not maintain its population. Period. Story. End of.

There is not a single country in the EU that has a fertility rate above the 2.3 children per woman that is necessary to maintain population levels.

How can you have a luxurious welfare state when you don’t have enough people to pay the taxes to fund it?

Simple. You can’t.

The same thing has happened to cities like Detroit…only, instead of depopulation as a result of falling birth rates, it has a problem with massive flight-from-insanity. I believe some people used to call it “white flight,” but it hasn’t been only whites that have left.

The same thing is happening to the Federal government and state governments throughout the country. Math’s hard…and it is cold…which is why My Progressive Little Ponyland is so much more fun! Let’s not talk about the elephant in the room. “Look! There’s a squirrel next to the free contraception machine next to that pretty Volt owned by the janitor, who has a “green” job!”

Resist We Much on June 9, 2012 at 8:07 PM

This will be a small price to pay if their economy rebounds. Clearly the world learned the lessons of 2008: No matter what, the banking system and credit markets must be functional. Does this mean the Spanish economy will now take off? Of course not; but it had no hope without a properly capitalized banking system. In other words, this is a necessary but not sufficient condition. Will it work? Time will tell … but for now, all eyes are turning to the Greek election and the continuing decline of China’s GDP growth.

TouchdownBuddha on June 9, 2012 at 8:15 PM

People take losses. Banks will become insolvent or lose their capital. Shareholders will go down. Governments will default. Bondholders will lose money. Even depositors will need to share the pain. Businesses will go bankrupt and jobs will be lost. The human pain will be immense.

.
Agreed. The biggest problem is … when it should have been allowed to happen in 2008 … when we should have let things take their natural course – the despicable people in Washington of both political parties – put their cronys and themselves before the country.

However it needs to be done. We wont’ see any sort of healthy economic growth till it happens. Right now we’re spending absurd amounts of wealth to keep banks and governments and failed businesses floating. Bankruptcies are at an incredibly low level for the economic fundamentals, no bank ever becomes insolvent and mortgage forebeances are endemic because of the political decision that we need to avoid the pain at all costs.

joana on June 9, 2012 at 7:01 PM

.
Agreed – but it’s too late and 100 times worse now. Ben Bernanke and Tim Geithner are likely to be viewed by history as the equivalents of Hitler and Stalin for encouraging/forcing the WORLD to go down the “extend and pretend” path.

The wealth of the world has been squandered by the corrupt insanity of less than 1,000 villians.

6,000,000,000+ people are going to suffer because of them.

How’s THAT for EVIL?

PolAgnostic on June 9, 2012 at 8:18 PM

PolAgnostic on June 9, 2012 at 8:18 PM

Shhhh.

You will be called a “Conspiracy Nut”.

Do not dare let the people know that there are $700 Trillion in derivatives that force the cost of every thing sky high to make sure us peons have no money. It is a fixed game.

Why we have the choice between two Democrats this election.

Steveangell on June 9, 2012 at 8:31 PM

This will be a small price to pay if their economy rebounds. Clearly the world learned the lessons of 2008: No matter what, the banking system and credit markets must be functional. Does this mean the Spanish economy will now take off? Of course not; but it had no hope without a properly capitalized banking system. In other words, this is a necessary but not sufficient condition. Will it work? Time will tell … but for now, all eyes are turning to the Greek election and the continuing decline of China’s GDP growth.

TouchdownBuddha on June 9, 2012 at 8:15 PM


Stop snorting pixie dust and focus on these numbers for just bank exposures

Spain – $ 125 billion USD … so far.

Italy – $ 500 billion USD minimum

France – $ 2 – 3 trillion USD

These numbers are presuming NONE of the derivatives (CDS’s, CDO’s, CDO’s squared, etc) are paid off … but since the majority of the derivatives are held by the governments to cover their exposure …. the problem is still not being addressed.

And the pain does not end with France.

PolAgnostic on June 9, 2012 at 8:31 PM

Resist We Much on June 9, 2012 at 8:07 PM

Can I borrow “My Progressive Little Ponyland”?

Seriously – Ed, AP, we need RWM in the Green Room STAT.

Steve Eggleston on June 9, 2012 at 9:05 PM

She couldn’t even if she wanted. There was a Supreme Court ruling last year that made it very clear that she lacks the authority to agree to any more bailouts or large-scale financial transfers on her own.

They don’t need any political decision from Germany to go ahead with this. They can use the European Financial Stability Facility. The money is already there. This deal is set in stone. And if necessary, the Bundestag would – and eventually will – vote for a ESM funded bailout.

The German people have had it. In Germany, the retirement age is 67 and retirees receive 46% of their final salaries as a pension. In Greece, men can retire at 55 and women at 50…unless they work in arduous and dangerous professions like television presenting, hairdressing or radio announcing, then they can retire at 45. Retirees receive 97% of their final salaries. What have they received in return? The Greeks played the Nazi card.

If there is one good thing that has come out of this, the Germans have begun to show a little backbone. For decades, they’ve been guilted into agreeing to things or accommodating small EU countries because of the World Wars. They had major self-inflicted guilt trips and many young Germans left the country to work elsewhere where they would not feel the dark shadow of the past as much. Obviously, the Nazis were beyond horrible. Members of my own family were killed by them, but I don’t hold the Germans of today responsible for the sins of their grandfathers.

As I said recently here, Germany could be used as a teaching aid to show how to breed self-respect out of a population…from Prussification to Pussification in less than a century.

I wouldn’t want Germans to revert back to the old militarism of the Prussians and Nazis, but I would like to see the Germans grow some balls and stop backing down whenever their profligate neighbours make demands and threats. This crisis has demonstrated that there might just be a flicker of fight left in the German people. I hope so.

Resist We Much on June 9, 2012 at 7:42 PM

Germany isn’t exactly the victim here. First, they’ve benefited immensely from the fundamentals that lead to this situation. Do you think German exports would have performed at the same levels if not for the periphery being fed with cheap money? The Spaniards wasted all that money creating an apparent and unsustainable wealth by building houses, but from whom do you think they bought the machinery to build them? Do you think German banks didn’t make money funding that insanity?

I mean, where do you think this money is going to end? If Spanish banks were wiped out, what do you think that would happen to the German banks? And to German companies? And to the German government itself?

All these bailouts only exist because German politics want to protect the European banking cartel and their own economy. Believing otherwise is foolish.

Sure, the German taxpayer is being fleeced, but in that aspect he isn’t much different than the Spanish common man.

joana on June 9, 2012 at 9:07 PM

Can I borrow “My Progressive Little Ponyland”?

Steve Eggleston on June 9, 2012 at 9:05 PM

LOL! Yes.

Welcome To ‘My Progressive Little Ponyland’! It’s Forward! It’s The Future And I Swear It Works!

Resist We Much on June 9, 2012 at 9:20 PM

joana on June 9, 2012 at 9:07 PM

I’m not dumping on the Spanish people. I feel sorry for them. I know that the problem is mainly the EU, the governments, the euro, the ECB, and the banks.

I HATE the EU and the euro and have been saying for YEARS that this exact situation would happen. For all of these years, I — and “Euroskeptics” like me — have been treated like Holocaust deniers or, Gaia forbid!, climate change deniers. Now, all of those that spewed spittle at me years ago by our refusal to join the euro are thanking their lucky stars that we didn’t.

Much of this was preventable. While the demographics and structural problems with the welfare state in most of the countries would have had to be addressed one way or another, the fact that countries with disparate work ethics, traditions, resources, etc., are yoked together to one currency and are incapable of being able to use monetary policy to alleviate their conditions was fully foreseeable and avoidable.

It is simply unrealistic to expect the Germans to continue to bailout their profligate neighbours, especially when people like the Greeks decide to abrogate the terms and conditions of the loan agreements. At some point, it may just be Germany, the Netherlands, Finland, etc., that leave the euro and leave it to the EU-Meds.

Resist We Much on June 9, 2012 at 9:30 PM

They don’t need any political decision from Germany to go ahead with this. They can use the European Financial Stability Facility. The money is already there. This deal is set in stone.

I wasn’t referring to this deal.

And if necessary, the Bundestag would – and eventually will – vote for a ESM funded bailout.

Yeah, and if necessary, the German people can burn the Bundestag down with all of the politicians in it.

You are really naive if you believe the German people are going to continuously bailout everyone else in Europe. They will NOT, as public opinion polls continuously show. The shift over the last year shows clear movement in the direction of “I’m as mad as hell, and I’m not going to take this anymore!” See Merkel’s party experiences in the recent elections, for example.

Resist We Much on June 9, 2012 at 9:38 PM

Spain is where Obama,Pelosi, Reid and Schumer want to drag the US…it is socialist, liberal, first european country to approve gay marriage….if a country chases out God by doing what he forbids, don’t act shocked when it all comes crashing down…

CCRWM on June 9, 2012 at 9:38 PM

doesn’t about 25% of the IMF’s funding come from the US? Its so great to bailout other countries…

Chubbs65 on June 9, 2012 at 9:40 PM

Spanish banks need around $60 billion to be liquid, but if they just get that much, who is going to loan them any money in the future? Or run any substantial business or deposits through them? Nobody.

So they want about double that, so that when suspicious creditors and investors arch their eyebrows, the Spaniards can just whistle a happy tune and jingle-jangle the coins in the their pockets, and everything will be fine.

Really. Just like Greece.

Adjoran on June 9, 2012 at 9:47 PM

Spanish banks need around $60 billion to be liquid, but if they just get that much, who is going to loan them any money in the future? Or run any substantial business or deposits through them? Nobody.

So they want about double that, so that when suspicious creditors and investors arch their eyebrows, the Spaniards can just whistle a happy tune and jingle-jangle the coins in the their pockets, and everything will be fine.

Really. Just like Greece.

Adjoran on June 9, 2012 at 9:47 PM

And Government Motors, really. That $7.1 billion “loan” GM “repaid” was really nothing more than excess Debtor-In-Possession funding restructured in such a way that it appeared GM was credit-worthy.

Steve Eggleston on June 9, 2012 at 10:54 PM

What group of countries against what group of countries?

Isn’t something like a dozen simultaneous c-wars more likely?

slickwillie2001 on June 9, 2012 at 6:58 PM

Just read some history and you’ll figure it out. There’s a lot of historical references which should explain why it won’t be civil wars, which threaten power.

KMC1 on June 9, 2012 at 11:38 PM

Europe won’t wake up and smell the coffee until Germany starts building tanks.

Adjoran on June 10, 2012 at 1:23 AM

Spain now looking for a $125 billion bailout

…call it stimulus and call JugEars for the check.

KOOLAID2 on June 10, 2012 at 1:26 AM

Europe won’t wake up and smell the coffee until Germany starts building tanks.

Adjoran on June 10, 2012 at 1:23 AM

They’re already there (see the Leopard II, the more-modern versions with a longer version of the gun on the Abrams). Wake me up when they start producing fighter-bombers on their own (no, not the Eurofighter Typhoon).

Steve Eggleston on June 10, 2012 at 8:52 AM

125 billion? Oh, that’s OK. For a second I thought you said TRILLION!!!

MaiDee on June 10, 2012 at 10:16 AM

We need a good walkathon for Spain, I think.

I pledge five olives per kilometer.

Anyone pledge more?

Sherman1864 on June 10, 2012 at 10:20 AM

Europe won’t wake up and smell the coffee until Germany starts building tanks.

Adjoran on June 10, 2012 at 1:23 AM

Not even. The last time around, nations that didn’t border them didn’t smell the coffee until they smelled the exhaust of said tanks right outside their front door.

MelonCollie on June 10, 2012 at 7:49 PM