Spain braced for further austerity as Madrid prepares for bailout

[alp227]

Source: The Guardian

Recession-hit Spaniards will this week be told to swallow yet more austerity as the government prepares a fresh round of reforms and another budget filled with spending cuts and tax increases that will allow it to seek a bailout from eurozone partners.

Pension freezes are also expected to form part of a raft measures to prepare the way for the European Central Bank (ECB) to give Spain support to control borrowing costs that will eat up a large chunk of next year's budget.

The budget is to be announced on Thursday, alongside the reform programme. Neither seemed likely to contain measures to immediately ease Spain's chronic 25% unemployment, which some analysts expect will rise to 26.5% next year.

On Friday Spaniards will learn just how big the hole in their banks really is, with an official report expected to say these must find an extra €60bn to cover damage wreaked by toxic real estate loans.

Read more: http://www.guardian.co.uk/world/2012/sep/23/spain-more-austerity-bailout

[a geek named Bob]

1. so the banks get bailed out, yet again

and people get to think nice long thoughts about how much they are privileged to serve their banking "masters"

[dipsydoodle]

3. It wasn't their own banks which caused the problem.

See below.

[a geek named Bob]

4. I know...

I could probably just hang the blame on Barclay's bank... easy target...

[dipsydoodle]

2. The hole in their major banks

was caused by lending to the regions primarily for their construction boom up to the 2008 financial collapse. Subsequent to the collapse their delinquent debt levels became unmanageable. The primary reason for Spain's high umemployment levels was the collapse of the construction industry.

As such blame lies with the banks and other financial insitutions which caused the 2008 collapse.

[Javaman]

5. Austerity. It's worked so well for Greece.

I wonder what the interest rate is on their bonds?