The Spanish Ministry for Tax and the Economy has roundly denied a report in the German edition of the Financial Times today (11-6-10) which claims the EU is preparing an intervention into Spain as the country faces bankruptcy.

The paper claims that ‘For some days the interbank trade in the South of Europe is at a practical stand still’. It says that unlike in Greece where the main concern is the large public deficit, in Spain the concern is for the debts in the private sector following the bursting of the real estate bubble. It says that more Spaniards than originally thought will be unable to repay their bank debts, and this will make the situation in the financial system even worse, and that more funds will be needed for the banks to survive.

This would mirror friends and family I have in Spain who are struggling with debts, borrowed amounts that should not have been given and over ridiculously long periods of time, two people I know will be mortgage free when they reach there mid seventies !

http://www.ftd.de/politik/europa/:spanien-finger-weg-vom-euro-topf/50125625.html

I think they will try to delay any intervention until the end of the summer (Oct) in the vain hope the summer tourist season will help stimulate things…. however, I do think there will be something required for Spain to help it through these tough times.

Santi - 12 June 2010 10:15 AM

The Spanish Ministry for Tax and the Economy has roundly denied a report in the German edition of the Financial Times today (11-6-10) which claims the EU is preparing an intervention into Spain as the country faces bankruptcy.

The paper claims that ‘For some days the interbank trade in the South of Europe is at a practical stand still’. It says that unlike in Greece where the main concern is the large public deficit, in Spain the concern is for the debts in the private sector following the bursting of the real estate bubble. It says that more Spaniards than originally thought will be unable to repay their bank debts, and this will make the situation in the financial system even worse, and that more funds will be needed for the banks to survive.

This would mirror friends and family I have in Spain who are struggling with debts, borrowed amounts that should not have been given and over ridiculously long periods of time, two people I know will be mortgage free when they reach there mid seventies !

http://www.ftd.de/politik/europa/:spanien-finger-weg-vom-euro-topf/50125625.html

Spanish government will always deny the danger of bankruptcy, until it will have to ask for some bailout money from the E.U, which is fully understandable. I hope this will not happen, but looking at the current situation, decline of the Euro and Euroland altogether, it is still a possible scenario.