Newspapers are reporting increasing pressure from Germany for Spain to accept a European bailout. The story is all the more credible as the Spanish government, refusing a bailout, has strongly denied any such bullying. Veteran euro crisis observers remember that Ireland’s bailout began in precisely the same way.
It thus seems safe to assume that rather sooner than later Spain will be the fourth EU country to receive billions from its European neighbours – only on a much larger scale. And we are seeing this hope played out in a rising stock market. This despite Madrid’s continuing insistence that it will not accept such help, and that any aid must be given directly to its banks. All up, Spain’s banks are thought to require between €75 billion and €100 billion worth of extra liquidity.
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