Spain's Bailout Prompts Greek Fury
Greece, Portugal may see Spain's bailout as motivation to renegotiate their own rescue packages
Spain's €100billion bailout this weekend has prompted fury in some Greeks who see Spain's rescue funds as free from the troika-imposed austerity conditions attached to their own bailout.
The Guardian editorialized Sunday that "the no-strings loan to [Spanish Prime Minister] Mr Rajoy will encourage politicians in Athens, Dublin and Lisbon to push to renegotiate their own rescue packages."
Spaniard Joaquín Almunia, the EU commissioner for competition, dismissed claims that there were no conditions on the bailout, saying, “of course there will be conditions” imposed in exchange for the bailout funds. “Whoever gives money doesn’t do so for free,” he added.
And as Common Dreams reported Saturday, the lack of austerity conditions is largely because the Spanish economy is already being hit by tough austerity measures demanded by Brussels, a reality not lost on those critical of the manner in which the major European nations have responded to the financial crisis that has ravaged Europe since 2008."
Rajoy has clearly stated that regardless of bailout conditions, Spaniards could expect a grim future. "Growth is going to be negative by 1.7 per cent and unemployment will increase," he said after securing the bailout.
The bailout ultimately socializes the burden onto the people of Spain and will likely spark more protest. The Guardian emphasized that "for all the emphasis on the term 'bank bailout,' this is a debt that will be put on the government's balance sheets. Spanish taxpayers will eventually have to pay for it. In other words, the population with the highest unemployment rate in the EU will have to spend decades repaying a debt incurred to rescue feckless savings banks, often run by useless managers and their crony directors. How that's taken by the nation that kickstarted the protest movement that went on to become Occupy is an open question, but the most likely answer is: badly."
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Angry Greeks are demanding better terms on their country's bailout after Spain was handed what they see as a 'no-strings attached' €100billion cash boost.
Far-left party Syriza, which could win the re-run of the Greek elections on Sunday, said the Spanish deal 'showed Europe was abandoning its policy of austerity'.
The agreement, they said, was in stark contrast to the deal hammered out with the Greeks two years ago.
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El Pais/Spain: The “men in black” coming to Spain after bank rescue
For as much as Prime Minister Mariano Rajoy tried to present the European “loan” to sort out Spain’s ailing banking sector as a triumph, the “men in black” -- as Finance Minister Cristóbal Montoro described them last week -- will be coming to Spain after all.
[...] Economy Minister Luis de Guindos had said over the weekend that there was “no conditionality” on the new “credit line” being prepared by Brussels.
But as the spokesman for the European commissioner for economic and monetary affairs, Amadeu Altafaj, on Monday pointed out, the increase in Spain’s indebtedness will have implications for its commitments to reining its public deficit and bringing it back within the ceiling of three percent of GDP by 2014. “Every euro that goes to debt that is growing is a euro that does not go to productive spending,” the spokesman said.
[...] In more graphic terms, the EU commissioner for competition, Spaniard Joaquín Almunia, said “of course there will be conditions” imposed in exchange for the loan. “Whoever gives money doesn’t do so for free,” he added.
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Giles Tremlett in Madrid and Jill Treanor reporting for The Guardian
Spanish PM claims bank bailout 'triumph' amid eurozone crisis
Spain's prime minister, Mariano Rajoy, on Sunday made a desperate attempt to portray a €100bn (£81bn) bailout of his country's banking system as a triumph at the start of a week which could determine the future of the single currency. [...]
But with Greeks returning to the polls on Sunday, the crisis engulfing the eurozone is far from over amid speculation that the absence of tough conditions attached to the loans being readied for Spain could give ammunition to attempts by Greece, Ireland or Portugal to renegotiate the terms of their bailouts.
Rajoy, speaking for the first time since the bailout was agreed, is embarking on a concerted campaign to present the deal as a national victory, with Spain receiving a cheap loan after European partners asked for little in return beyond regular interest payments.
The Spanish newspaper El Mundo described the financial rescue of its banks by its European partners as a "bailout without humiliation", reflecting Spain's determination to avoid a direct intervention in its economy of the kind suffered by Greece, Ireland and Portugal.
Financial analyst Gary Jenkins, of research house Swordfish, said it was "difficult to see how a 'bailout lite' will go down well in Ireland, Greece or Portugal". He added: "We come to the week that may well dictate the future of the eurozone. On a worst-case scenario, the outcome of the Greek elections that take place on Sunday 17 June could create even further uncertainty and stress in the system.
"However, it could be argued that whoever manages to form a government will feel that they have a little more moral high ground to renegotiate the terms of the bailout than was previously the case due to the Spanish bailout."
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The Independent/UK: Fears that Spain's bailout relief may be short-lived
Mr Rajoy also sounded a note of caution, warning that there were dark days ahead. "Growth is going to be negative by 1.7 per cent and unemployment will increase," he said. In Madrid, there were promises of protests next weekend. But most Spaniards appear willing to wait and see whether it brings more austerity or the first signs of recovery. "It could be the end of the world, it could be the beginning of a new one," one Madrid newspaper vendor told The Independent.
Less than 24 hours after securing €100bn of European money, the Spanish Prime Minister painted a grim picture of his country's economic future, warning that despite the financial lifeline, more jobs would be lost and Spain would be unable to pull itself out of a double-dip recession.
"This year is going to be a bad one, growth is going to be negative by 1.7 per cent and unemployment will increase," Mariano Rajoy said yesterday, laying the blame for Spain's current economic difficulties squarely on the previous government. "Last year, the country's public administration spent more than €90bn than it received," he said. "You can't go on like that."