Spain’s Banks Get 100 Billion Euro Bailout Package From Eurozone
The bungling politicians of the Eurozone have done it again; another bailout. This times it is Spain. Not the entire Spanish economy (which may come later, though the politicians swear that will never happen) but its insolvent banking sector. The Eurozone has agreed to allow Spain to borrow up to 100 billion euros from its bailout fund, a sum equivalent to about $125 billion USD, with supposedly no strings attached.
As they have done so often in the past, the political leaders in the Eurozone are praising themselves for their “brilliant” move of further indebtedness for the entire monetary union for supposedly, once again, “saving” the euro. And as has happened before, they will undoubtedly eat crow when the next bailout package is offered by these same inept politicos.
The “no strings attached” deal to save Spanish banks actually poses a serious problem. Ireland originally had a relatively stable fiscal situation until the bumbling politicians in Dublin foolishly decided to backstop their crumbling private banks with public funding, leading to the insolvency of the Irish economy. The bailout package Ireland received from the Eurozone bailout fund required crippling austerity measures. Now some in Ireland are urging that their bailout terms be modified, in light of Spain having its banks directly bailed out by the Eurozone.
In conclusion, while politicians in Europe and the United States are cheering this latest bout of bailout fever in Europe, nothing positive is really happening in terms of addressing the root causes of Europe’s economic malaise.