(ES) Spain region of Catalonia said to be asking for €5.023B, tapping liquidity facility – financial press
(ES) Spain offical: Valencia region needs over €3.5B from the regional fund- To negoiate aid amount within weeks – Needs to fund past years’ spending
(ES) Spain Fin Min de Guindos:
(ES) 8/23 reports circulated that Spain would not be requesting aid before Sept 12 [date of German constitutional court decision] and is currently discussing technical details of terms for potential sovereign bailout. Earlier today, the EU Commission reiterated it has not received any request from Spain regarding a full bailout and no discussions for any other support for Spain are underway, but talks are ongoing at all levels on the response to the debt crisis.
How to interpret these headlines?
Following the news from yesterday on the Spanish Valencia region requesting aid from the federal government, Catalonia also decided to ask for aid today. These new headlines add more pressure to Spain and the expectation for ECB to intervene is at all time high. Of course, ECB has made it clear that no bond purchases before September 12, but I believe it is just a formality, as the decision has already made.
Spanish Bailout request will soon follow after September 12, especially considering the dire situation that Spain is in. The key benefit being underlined here is ECB’s promise of bond purchases, which will address the core problem, high cost of borrowing. I believe this will effectively calm the market, drive bond yields lower, thus help the overall contagion fear that stemmed from European crisis… My view: Buy EURUSD ahead of Spanish Bailout.
Spanish bailout is just weeks away…
August 29, 2012 by 4 Comments