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It should also explain who has all the leverage. For those confused, JP Getty has a reminder: "If you owe the bank $100, that’s your problem. If you owe the bank $100 million, that’s the bank’s problem." Now just replace "$100" million with "€450 billion" (for now, likely to be €1 trillion in a few days), and "Spain" with "Germany", and it should all fall into place
Five officials in Brussels and Berlin said the finance ministers of the single currency area would hold a conference call on Saturday morning to discuss a Spanish request for aid, although no figure on the assistance has been set. The Eurogroup, which comprises the 17 euro zone states, will issue a statement after the call, which is scheduled to take place before midday (1000 GMT), the sources said. "The announcement is expected for Saturday afternoon," one of the EU officials said. The dramatic move comes after Fitch Ratings cut Madrid's sovereign credit rating by three notches to BBB on Thursday, highlighting the Spanish banking sector's exposure to bad property loans and to contagion from Greece's debt crisis.
Originally posted by facchino
One thing I'd love to know is why this is happening in the eurozone, as it didn't happen in the individual countries before this - it's like it was setup to fail so someone could exhibit control over the whole area through financial penalties...Germany seemingly the top contender for this role? This is an area worth investigation..maybe as a physical takeover didn't work it's resorted to financial means to and Europe. This may be controversial but I believe this to be the case...
(Reuters) - Euro zone finance ministers rushed Spain into an EU-funded rescue for its debt-stricken banks to pre-empt the threat of a bank run if Greece's debt crisis flares again but any respite for Madrid and the euro may be short-lived.
Some market participants see Rome, which has Europe's highest debt ratio after Greece but a low budget deficit, as potentially next in line for a bailout which the euro zone could ill afford.
"Where next? 200 or 300 billion euros for Italy? (The Spanish bailout) is just compounding the agony," said Nick Hocart, a director at currency fund manager Xenfin in London.
Economists at Citi said Italy faced rising debt for a prolonged period and "will most likely require some form of intervention from the ECB (which supported Italy already twice), the EFSF/ESM (euro zone rescue funds) and the IMF at some point".