Archive for May 31st, 2012

31/05/2012

Spanish Banking Crisis Threatens Global Finances

Human Wrongs Watch

By Andre Damon (WSWS*) — Fears that the euro zone is nearing breakup sent panicked investors to safe haven assets Wednesday, driving the yields on US government debt to their lowest levels since 1946.

http://www.wsws.org/articles/2012/may2012/spai-m01.shtml

**Spanish Prime Minister M. Rajoy. Photo: Iker Parriza

Investors fled from Spanish and Italian bonds after the European Central Bank made clear that it would now allow Spain to tap its financing to recapitalize Bankia, the country’s fourth-largest bank, which last week requested a €19 billion bailout from the Spanish government.

In response to the ECB’s statement, the Spanish government announced it would raise an additional €19 billion to bail out the bank.

Yields on Spanish 10-year bonds shot up 0.23 percentage points to 6.64 percent, bringing the country dangerously close to the 7.0 percent rates that forced Greece and Portugal to request bailouts from the European Union.

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