Monday, June 11, 2012

'Troika' Will Oversee Spain Bailout

There Will be Conditions

The "troika" of Eurozone austerity--the International Monetary Fund, the European Commission and the European Central Bank--will oversee financial assistance to Spain, contrary to the rosy, no-strings claim by the country's prime minister, Mariano Rajoy. Read more.

The news that the Spanish premier misrepresented or misunderstood the terms and conditions of the big banking sector bailout--the idea that there would be no conditions seemed too good to be true from the get-go--is likely to further fuel anti-austerity sentiment across the Continent and help Greece's anti-austerity, radical left party, SYRIZA, an aggregation of various groups, which is expected to score a victory in the June 17 Greek elections.

Prediction: As more information becomes publicly available, a great many Spaniards will see the ballyhooed bailout as a sort of Spanish Prisoner scam. Their country can get the practically free (low interest rate) monetary aid, alright, but they--the ordinary people--will have to pay for the money, in advance, by accepting fresh austerity measures that are bound to further impoverish them. Recall that Spain has already signed onto 27 billion euros in austerity measures for this year and about the same amount next year. The spending cuts have deepened Spain's depression. Unemployment officially stands at 25%. Youth unemployment is more than 50%.

The situation is fraught with danger; democracy will be tested.

Related Articles:
Relief for Spanish Banks Doesn't End Eurozone Crisis            
How Greece Looks from Asia