Spain's Regional Bailout Fund: A Drop In A Bucket Of Insolvency

Tyler Durden's picture

It will come as no surprise to many that the initial size estimates of Spain's regional bailout fund are now being questioned. The government is now 'analyzing' whether the EUR18bn 'temporary' bailout fund needs to be increased. In a word - Yes! As this chart from Bloomberg Briefs shows, the size of the 'help' is pittance compared to the debt-loads of Catalonia alone (which recently sought secession). As Bloomberg's Niraj Shah notes, Spanish regional elections in the Basque country and Galicia take place on Sunday, followed by a ballot in Catalonia on Nov. 25. Prime Minister Mariano Rajoy may prefer to seek a bailout after the elections as a series of defeats for his People’s Party could exacerbate investor concerns about the government’s ability to control spending and revenue and bring down the deficit. Perhaps our 'context' update on Spain's situation last night was rather prescient after all?



In what seems like a remarkable coincidence:


  • Spanish region of Asturias will seek EU261.7m from central govt’s rescue fund for regions



Source: Bloomberg Briefs

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LawsofPhysics's picture

paper fucking promises - FAIL.

JPM Hater001's picture

From the looks of it I dont know why they dont just let Catalonia go...There would be muych less debt left.

Of course I doubt Catalonia will pay much if any of it so why not load it all in.

LawsofPhysics's picture

Did you say we should let california go?  Wait what, oh sorry, Catalonia, I see.No worries, that which cannot be sustained, won't be.

firstdivision's picture


The fun part of this whole EZ charade is that France is the one that will drag all down.  I have no idea why the bond vigilantes are not going after FRA, especially since their revenue/expense ratio is death incarnate, but I guess in due time.


falak pema's picture

u tell me y those vigilantes arn't going after Cali and New Jersey.

Pot n kettle. Its nice to ride a white horse. U think the US system is immune?

Think again and remember the guy who is adamant that Greece should not fail is : Timmy!

I wonder why...

firstdivision's picture

Upset Frenchie says what?

Why not talk about the debt problems of the various cities on planet Krypton?

prains's picture

muddle through economics at its finest, confuse, spin, confuse, rinse repeat

THE DORK OF CORK's picture

The problem with the PIigs is that they continue to take the banks seriously.

These are metaphysical debts - they chart the wastage of historical natural resourses...........

So what ? the banks have always did this.

Just produce Fiat and see where the remaining wealth chips will fall.

I would think the PIigs would come out best from this Fiat production as the banks nests mainly reside in London , New York , Paris , Frankfurt etc.

Caviar Emptor's picture

If ECB just collateralizes paella the bailout fund could rise

LiesAreTheOnlyTruth's picture

What's another few billion Euros, it's just paper, get over it already.

The world inflates itself ... how can it hurt?  Assets go up, property goes up, taxes go up ... what's the harm?

Purchasing power may be eroded, just get a third job and quit complaining!  OR ... you could put your money in the market and take advantage of all those lower and lower margin requirements :)

THE DORK OF CORK's picture

Remember at any given time a country can only produce a certain amount of wealth......the physical wealth does not disappear overnight...............but if the debt built up previously is seen as a real physical good then rational capital allocation breaks down and you get a real physical breakdown crisis as seen in Europe today.

This  elementry mixing up of metaphysical claims on wealth and physical wealth is obviously a London meme.

The Spain of today has more physical wealth then the UK..............just saying like.

Caviar Emptor's picture

We have witnessed a grand deterioration in purchasing power for 1)Individuals which has metastasized to 2) Financial systems 3) Sovereigns  4) Economic Zones and 5) The global economy. All part of Biflation theory

LawsofPhysics's picture

"All part of Biflation theory" -  Yes, but totally meaningless.  You need energy as an input in order to actually do anything.  Total energy production has flatlined, total population growth is still growing exponentially. Humanity is about to (re-)learn all about real inputs and outputs.

Hedge accordingly.

THE DORK OF CORK's picture

@law of Physics.

Yes , but why do 3 million people + still use the Madrid to Barcelona air shuttle when there has been a functional high speed line since 2008 ?

There is also a series of local monetary breakdowns withen each euro vassal state.......i.e. - they are exporting hard currency $s and reducing domestic demand.

LawsofPhysics's picture

Eventually, water finds it's own level.  Whether or not it goes through the dam (high speed rail) or around it (flights) is totally irrelevant.

Sorry, what was the point again?  "Currency" is a human construct and the LoP don't give a shit.

_ConanTheLibertarian_'s picture

Prediction: we are going to see secession attempts by various regions in Europe. Think Catalonia, Flanders, Scotland, Northern Italy, because people there (and elsewhere) first want out of the EUSSR and second take this a step further and take the opportunity to become a sovereign state.

Eventually they will succeed after a massive revolt.

THE DORK OF CORK's picture


They want to become even smaller Euro Vassals.

Mini Titans such as the former nation states of Spain & Italy can be harder to push around so its best to break them up into smaller pieces.

The euro is the most extreme of market state constructs - it wants this.

The Euro boys have been giving major regional funds to these areas since the 80s.

Why do you think they have been doing this - charity ?

They have also changed the political geography courses around this time.

The nation state may be a bitch as it is to a large extent owned by the banks but the modern market state is the 9th circle of banking hell.

Fuck Europe and this  Machiavellian experiment.

They have turned us all into a bunch of muppets.



nmewn's picture

Where's my debt binky!!!

(mmm...slurp slurp slurp)

insanelysane's picture

I think Frau Merkel has already chained Germany to this sinking ship.  The captain always goes down with the ship but they usually go down last, Italian captains not withstanding.

Inthemix96's picture

Well here up mate.

If you think I go down last on Herr Merkel, you have another thing coming.

I wouldnt touch Adolf the "II", with a stolen dick


Wile-E-Coyote's picture

Italian captains are normally going down on rich middle aged women.

Hobbleknee's picture

Didn't Catalonia say they wanted to secede because everyone else was dragging them down?

Jlmadyson's picture

They are already at the 18B limit anyways from what I'm reading this morn.

Waydown's picture

The Balearic Islands are in for 355 million euros, Asturias 261 millions

earnulf's picture

If Catalonia were to break away from Spain and reneg on the 40+ bEuro debt and issue it's own currency or adopt a different existing one, just how much havoc would that cause?     Spain suddenly sheds the most indebted region, the debt is repudiated and 40+bEuros vanishes the same way it was created, out of thin air.

See, there are upsides to this!

Wile-E-Coyote's picture

Spain is toast.

The true level of liabilities is still not known.

They will become Greece 2.0 but the Spanish people won't lay down like the Greeks, expect major civil unrest.

youngman's picture

We are arguing over numbers that we know are not correct....its worse and getting worse every day....but Italy just sold some crap today...18 billion I think...and something or someone bought it all a lower rate no less...the world is truly crazy

venturen's picture

I think they have the Bull by the horns or either good?