They want that German money, they need it. But with each passing week, the rest of the world is less and less likely to give it to them. It’s got to be appalling to be a Spanish citizen these days and hear one of your country’s leaders literally begging for money. Begging from anyone who will listen. Like a crack addict. It’s shocking really, this is the fourth largest economy in Europe.
This is a whole new chapter – the denial part is over. Cyprus came clean this morning, as well. But this is a big deal, regardless of how markets chose to react to it today…
Spain said on Tuesday that credit markets were closing to the eurozone’s fourth biggest economy as finance chiefs of the Group of Seven major economies conferred on the currency bloc’s worsening debt crisis but took no joint action.
Treasury Minister Cristobal Montoro sent out a dramatic distress signal about the impact of his country’s banking crisis on government borrowing, saying that at current rates, financial markets were effectively shut to Spain.
‘A bigger response from the politicians is gaining some steam’
“The risk premium says Spain doesn’t have the market door open,” Montoro said on Onda Cero radio. “The risk premium says that as a state we have a problem in accessing markets, when we need to refinance our debt.”
“sent out a distress signal” – my god.
The latest development (via Bloomberg) is that the EFSF is talking “preliminary credit lines” for Spain. There’s nothing “preliminary” about it, this is the first step toward a full scale bailout as contagion rages across the country’s financial sector like some kind of giant, panic-fueled sex moose.