Sunday, June 10, 2012

As Spain Moves Beyond the Denial Stage; What Happens Next?

After years of uncertainty, countless meetings among central bankers, financial ministers and policy makers; Spain, the country with likely the largest set of financial issues in the Eurozone, is beginning to acknowledge that its banking system may need assistance.  On Saturday, Eurozone finance ministers agreed to provide €100 billion in bailout funding.

MY TAKE

Similar to other Eurozone countries, Spain’s denial was followed by admissions of significant financial problems.  In this light, the Eurozone makes progress with each admission.  However, topics needing clarity include: 
  • how large are the region’s economic problems, 
  • how effective will  responses by policies makers be, 
  • how vulnerable is the region  to social unrest and 
  • what impact will the Eurozone have on the global economy?  Stabilization was the tone across many global markets last week – but the duration between positive and negative market swings may be contracting.

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