German magazine Der Spiegel has an article emphasizing the need for financial reform not only in Spain but throughout Europe.
The publication emphasizes that at this time, the Spanish banking system is built on unstable loans worth approximately one billion euros and encrypts the Spanish banking rescue between 50,000 and 200,000 million.
"Since that amount of money would be an overload for both banks to the government budget, experts believe that the Spanish government should seek urgent assistance to European Financial Stability Fund (EFSF).
However, Der Spiegel notes that Mariano Rajoy "resists this movement," because it would give members of the euro "a voice in governing the country." Also displayed are the magazine, also hang the disgrace to Spain as a country of high risk and, probably, "this will cause isolation of the international financial markets for a long time."
Under the circumstances, says Der Spiegel, direct payments to the banks of the euro countries become "a sensitive issue." The German Government completely rejects the idea "for fear that their money disappear into a bottomless pit." In fact sources said that the German central bank, the Bundesbank, say they have no clue what is happening in Spanish banks.
To Der Spiegel, this lack of knowledge is a consequence of nationalism in Europe has allowed the flourishing of its financial industry. The European banking industry is more connected internationally than any other, however, "each country controls its national bank and, if necessary, rescue their banks on their own."
Therefore, the journal recognizes citing Clemens Fuest, a German economist, professor at Oxford University and adviser to the German government, "without a fundamental reform of the European banking sector, the euro is in danger."
Thursday, May 10, 2012
Posted by The Shocked Investor at 6:42 AM
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