Whispers and nameless sources this morning are signaling Spain is preparing to ask the European Central Bank for a sovereign bailout. Bond and equity markets in Spain and elsewhere in Europe have zigged and zagged throughout the day depending on the winds.
Recently Spain has been the focal point of international attention with violent anti-austerity riots last week and the government has come under pressure to make a formal request for a full government bailout.
The European Central Bank has signalled that it is ready to step in, but various news outlets are reporting that Germany has privately asked Spain not to request a bailout. It is suspected that Germany would like to delay Spain’s bailout a few weeks and lump it together with Cyprus, Greece and others. Political will is dwindling domestically in Germany as “bailout fatigue” sets in.
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