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Economy
In reply to the discussion: Weekend Economists Reminisce: Black Monday October 19, 1987-2012 [View all]xchrom
(108,903 posts)28. Merkel dashes hopes of direct recapitalization for Spanish banks
http://elpais.com/elpais/2012/10/19/inenglish/1350651794_005156.html
German Chancellor Angela Merkel ruled out the possibility of Spain benefitting retroactively from allowing the euro zones rescue fund to directly recapitalize banks.
That means that the loan of up to 100 billion euros Spain will receive from its European partners will remain on the governments books at a time when it is already struggling to tame the budget deficit and put a cap on public debt.
There will not be any retroactive direct recapitalization, Merkel told a news conference at the end of a European Union summit in Brussels. If recapitalization is possible, it will only be possible in the future, so I think that when the banking supervisor is in place we wont have any more problems with the Spanish banks; at least I hope not.
The summit agreed to move toward a banking union for the euro zone under the direct supervision of the European Central Bank next year and to eventually allow the European Stability Mechanism (ESM) to directly inject capital into ailing banks. Spain and France had lobbied for quicker implementation of a banking union. Merkel denied delaying the move had anything to do with the German elections next year.
German Chancellor Angela Merkel ruled out the possibility of Spain benefitting retroactively from allowing the euro zones rescue fund to directly recapitalize banks.
That means that the loan of up to 100 billion euros Spain will receive from its European partners will remain on the governments books at a time when it is already struggling to tame the budget deficit and put a cap on public debt.
There will not be any retroactive direct recapitalization, Merkel told a news conference at the end of a European Union summit in Brussels. If recapitalization is possible, it will only be possible in the future, so I think that when the banking supervisor is in place we wont have any more problems with the Spanish banks; at least I hope not.
The summit agreed to move toward a banking union for the euro zone under the direct supervision of the European Central Bank next year and to eventually allow the European Stability Mechanism (ESM) to directly inject capital into ailing banks. Spain and France had lobbied for quicker implementation of a banking union. Merkel denied delaying the move had anything to do with the German elections next year.
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