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Spanish Regional Bailout Fund Runs Out Of Money Just As Regional Elections Begin

Tyler Durden's picture




 

Today is an important day for Spain, where two benchmark regions - the separatist inclined Basque region and Rajoy's own Galicia - are holding the first of many elections for regional government in what will be seen as a harbinger of popular (lack of) support for Mariano Rajoy's policies (and further explanation why any incremental steps taken by the increasingly unpopular PM to hand over Spanish sovereignty to foreign could well be his last).

AP explains:

"Two northern regions in Spain are holding elections for their legislatures Sunday in the first popular test of the central government's stringent austerity policies since it came to power late last year.

 

A deepening financial crisis and how best to address the nation's separatist tensions are the main issues facing political leaders and voters in the turbulent Basque region and in northwestern Galicia. With 2.7 million voters, Galicia is a traditional stronghold of the ruling Popular Party and the homeland of Prime Minister Mariano Rajoy, so an upset there would rock the PP regionally and nationally.

 

Spain has separatist groups in Galicia, the Basque region and prosperous and influential Catalonia. About 1.8 million Basque voters are likely to oust Socialist leader Patxi Lopez — who ruled thanks to an agreement with the PP — from the 75-seat legislature in the industrious and well-off northern region that borders France. The Basque region has been wracked by decades of separatist violence.

 

"We hope this election succeeds in bringing us peace, so we can reach an understanding between ourselves and let us know how to make concessions," said Sister Teresa Ormazabal, a nun in the Basque region's largest city, Bilbao. Lopez was jostled by demonstrators carrying placards backing violent Basque separatist group ETA as he voted early Sunday."

None of this is news. What may however surprise many is that as of Friday, Spain's "temporary" €18 billion regional bailout fund is now practically empty: a discovery which will hardly make any additional regions, who have so far dragged their feet in demanding a national bailout, happy with the Prime Minister's handling of Spain's creeping bankruptcy.

Calculating:

  • Total bailout fund size: €18 billion

Bailouts already requested:

  • Cataluña: €5.023 billion
  • Andalucía: €4.906 billion
  • C. Valenciana: €4.500 billion
  • C. La Mancha: €0.848 billion
  • Canarias: €0.757 billion
  • Murcia: €0.528 billion
  • Baleares: €0.355 billion
  • Asturias: €0.261.7 billion

Subtotal: €17.179

Bailout funding left: €0.821 billion. Oops.Those who waited in hopes things will get better: tough luck.

And as we observed last week, here is why the regional "bailout issue" is only going to get much worse.

To summarize: Spanish regions: broke; Spanish banks: broke: Spain itself: on the verge of being bailed out by Europe. => Time to buy more SPGBs.

 

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Sun, 10/21/2012 - 11:03 | 2907680 Popo
Popo's picture

Oh dear, Spain needs money.   Bend over Germans.  Furher Merkel wants to take you all from behind again.   She needs to save the banking elite by giving more of your future away to the Spaniards.   

Sun, 10/21/2012 - 12:21 | 2907810 Eireann go Brach
Eireann go Brach's picture

But we have the Worlds best Football team, so who cares!

Sun, 10/21/2012 - 12:27 | 2907823 redpill
redpill's picture

I'll graciously take the remaining 821 million Euros off their hands.  I need a bailout.

Sun, 10/21/2012 - 13:11 | 2907875 icanhasbailout
icanhasbailout's picture

hey that's my line

Sun, 10/21/2012 - 11:04 | 2907684 Gully Foyle
Gully Foyle's picture

How will this affect Benidorm?

Sun, 10/21/2012 - 11:08 | 2907687 The Gooch
Sun, 10/21/2012 - 11:55 | 2907766 lasvegaspersona
lasvegaspersona's picture

Gooch

thank you

I learned something already this morning!

Always wondered how those worked. Much simpler than I imagined.

Sun, 10/21/2012 - 11:17 | 2907699 ngrySpaniard
ngrySpaniard's picture

Why don't you people stop saying that german tax money is given to us spaniards, when actually the german tax money is given to spanish banks that in turn owe it to the german, french and netherland PRIVATE banks?

Sun, 10/21/2012 - 11:38 | 2907740 Kayman
Kayman's picture

ngrySpaniard

Being new to Fight Club, you haven't been privy to ZH history.  Most, not all, believe that it is all about saving the criminal bankers and little to do with saving the citizens of any given country.

Sun, 10/21/2012 - 12:42 | 2907843 john39
john39's picture

Not only saving the criminal bankers, but also destroying the financial security of the average person in each control, leaving them desperate and subject to further manipulation and control of the fascists behind this. Why? Quite simple, they sold out to evil.

Sun, 10/21/2012 - 11:18 | 2907700 ziggy59
ziggy59's picture

I think some decimals are missing.. Just sayn'

Sun, 10/21/2012 - 11:17 | 2907701 urbanelf
urbanelf's picture

Europe still exists?

Sun, 10/21/2012 - 11:47 | 2907754 Water Is Wet
Water Is Wet's picture

Old joke:  You're American before you go into the bathroom, and American when you come out.  What are you while you're in the bathroom?  European!

Substitute your own nationality, obviously.

Sun, 10/21/2012 - 11:18 | 2907703 zilverreiger
zilverreiger's picture

I thought catalonia was a rich area, but they got 40B debt... highest of all provinces

Sun, 10/21/2012 - 11:20 | 2907710 Conman
Conman's picture

An the US is a rich nation, look at our debt.

Sun, 10/21/2012 - 11:41 | 2907744 Kayman
Kayman's picture

"An the US is a rich nation, look at our debt"

And the U.S. was a rich nation.

Sun, 10/21/2012 - 11:20 | 2907708 Conman
Conman's picture

Spaniards must wait until german elections are over. Then they can give up their sovereignty and whore them selves out for a bailout. Mind you - never intending to stick to the terms of the bailout a la greece or any of the PIIGS.

Sun, 10/21/2012 - 11:21 | 2907712 Dareconomics
Dareconomics's picture

When the Oliver Wyman completed its stress tests of the Spanish banking system a few weeks ago, it was suspicious that the pre-test estimate of €60bn to recapitalize only a shade higher than the €59.3bn result. We are now told that the regional bailout fund has assisted all of Spain's regions with €821mm to spare.

From ZeroHedge:

  • Cataluña: €5.023 billion
  • Andalucía: €4.906 billion
  • C. Valenciana: €4.500 billion
  • C. La Mancha: €848 billion
  • Canarias: €757 billion
  • Murcia: €528 billion
  • Baleares: €355 billion
  • Asturias: €261.7 billion

Now, the Spanish finance ministry must employ forecasting geniuses. Then again, their budget deficit projections have been way off, so perhaps something else accounts for these remarkably prescient forecasts while under extreme economic and fiscal duress.

Jean-Claude Juncker says, "When it gets serious, you have to lie." It must be serious in Spain:

http://dareconomics.wordpress.com/2012/10/13/mainstream-media-misreporti...

Sun, 10/21/2012 - 11:24 | 2907717 hampsterwheel
hampsterwheel's picture

I thought it was if Spain were to be bailout it would mark the end of the EU - (that's what everyone was saying 18 months ago) now here we are and its getting bailed out - Greece is still in - no one has left,no debt written down, no banks have been forced to take any losses whatsoever - the IMF was able to get two GS employees heads of State gigs - I'd say all those pundits were wrong - this is very bullish -

 

Sun, 10/21/2012 - 11:28 | 2907722 bank guy in Brussels
bank guy in Brussels's picture

And years after the various national debt defaults ...

Vulture fund in Cayman Islands, NML Capital Ltd, owning old defaulted Argentine bonds, have convinced judges in Ghana to seize a beautiful sailing ship from Argentina when it was docked there in Africa

Current news story supporting ZH's past articles re defaulted bond international litigation

« The Ghanaian judge acted on a claim by NML Capital Limited, which is based in the Cayman Islands.

Its owner, billionaire investor Paul Singer, leads a group demanding payment in full, plus interest, for dollar-based Argentine bonds bought at fire sale prices after the country's economy collapsed a decade ago, forcing a sharp devaluation of its currency. »

Nice looking ship

http://www.aljazeera.com/news/americas/2012/10/201210215038328399.html

Sun, 10/21/2012 - 19:57 | 2908545 Non Passaran
Non Passaran's picture

This is old news and was on ZH before. Besides it's off topic.
-1

Sun, 10/21/2012 - 11:29 | 2907727 PontifexMaximus
PontifexMaximus's picture

no problem, spain will survive, a few demonstrations more, but do not wory, their standard of living will not suffer. probably 1 cerveza less, but at the end of the day, business as usual. spain is important for the reelction of merkel, she will be the elder stateswoman and will win. didn't you get it, that draghi has already solved all the problems in europe, the local national governments do not count at all. and again, the us need a weaker USD and that will attract the EUR as a investment currency for the big gov. funds for diversification. watch target funds, they have peaked and slichtly coming back, meaning that national european debt has been bot.....by outside funds. and again, we need spain just for the mass media to write.

Sun, 10/21/2012 - 11:31 | 2907731 kito
kito's picture

Troika milk will flow soon enough

Sun, 10/21/2012 - 11:53 | 2907738 Atomizer
Atomizer's picture

Spain, showed signs of real convergence

 

Santa Klaas Knot chimes in 

Edit: For the weak minded fucksticks who are scared to dl a PDF from the Central Bankers BIS site. Here's my masked link

http://www.bis.org/review/r121016k.pdf?frames=0

Sun, 10/21/2012 - 11:42 | 2907745 LongSoupLine
LongSoupLine's picture

No one could have predicted this!

Sun, 10/21/2012 - 12:01 | 2907779 djsmps
djsmps's picture

No one expects the Spanish insolvency.

Sun, 10/21/2012 - 11:45 | 2907748 LeisureSmith
LeisureSmith's picture

Er, i might be confused, but shoulden't the numbers be like this:

 

  • Cataluña: €5.023 billion
  • Andalucía: €4.906 billion
  • C. Valenciana: €4.500 billion
  • C. La Mancha: €0.848 billion
  • Canarias: €0.757 billion
  • Murcia: €0.528 billion
  • Baleares: €0.355 billion
  • Asturias: €0.2617 billion

or this:

 

  • Cataluña: €5.023 billion
  • Andalucía: €4.906 billion
  • C. Valenciana: €4.500 billion
  • C. La Mancha: €848 million
  • Canarias: €757 million
  • Murcia: €528 million
  • Baleares: €355 million
  • Asturias: €261.7 million

?

 

DAMN! to slow..

Sun, 10/21/2012 - 11:47 | 2907751 orangegeek
orangegeek's picture

Euro and American markets are coupled tightly.

 

The drop on Friday is likely the start of the big move down.

 

http://bullandbearmash.com/chart/big-drop-today-sp500-channel-support-br...

 

It is long overdue.  Q2 was a load of lower revenue on higher earnings.  When did lower revenue become bullish. 

 

When this is all over, say good bye to the entitlements and pensions.  Both of these will be a drop in the bucket as compared to what is offered today.

Sun, 10/21/2012 - 12:17 | 2907805 virgilcaine
virgilcaine's picture

Who need to ever work again?.. Bailouts 4 ever.

Sun, 10/21/2012 - 13:12 | 2907877 q99x2
q99x2's picture

And automation and robotics are so much more efficient.

Yep time to jog, play music, meditate and study the young girls in Sothern Californian colleges.

Oh no I won't come down no more. - MH

Sun, 10/21/2012 - 12:32 | 2907828 Atomizer
Atomizer's picture

From January of 2011

Hitler finds out that Spain will need bailing out.

 

Wash, rinse and repeat until there is no more money to steal. Declare a financial collapse, riots & shootings will ensue. Population reduction will occur and pension obligations will disappear. We then begin to rebuild on a cheap labour wage scale.

 

Central Planners, tricks are for kids

Sun, 10/21/2012 - 12:59 | 2907830 THE DORK OF CORK
THE DORK OF CORK's picture

Again when Cuba was cut off from Soviet capital (energy) flows it did not stop dead for lack of token money.

How absurd !!!!!

Another example of whats really happening in Spain.

http://www.panoramio.com/photo/74586978

A energy crisis yet these units must make a profit expressed in Euros which is a flawed unit of account in Spain and the other PIigs , which means more leakages of domestic demand…… via now hard $ exports / oil imports

es.wikipedia.org/wiki/Tranvía_de_Vélez-Málaga

“Suspension of service since June 3, 2012 – the tram has stopped working due to lack of budget for maintenance”

which means they cannot find the tokens for LABOUR – not energy , they are force feeding us oil and the medicine is not good for us , its good for them

 

They are burning every village for a purpose….

It is not mindless.

http://www.youtube.com/watch?v=Oo1KpnKdYhc

They (the city) is destroying the Spanish capital investments so that they can become relatively richer.

Net wealth or the commons is not a concept they choose to understand.

Efforts to preserve metaphysical wealth claims destroys real physical wealth (Labour knowledge , physical capital, the complex linkages that connect towns with their hinterlands etc etc.

We have seen Titanic malinvestment during the post 1987 Euro credit hyperinflation phase and now titanic malinvestment during the  money deflation phase of this Euro nightmare..

The EIB is investing more money in Spain then any other country this year (6 Billion already) - mainly in rail , tram and solar tower shit - but local authorties do not have the money tokens to run existing systems.

The Euro is not a currency - its a yield vehicle  , it can only grow outwards via waste production , it refuses to give its vassals the tokens to use the waste it itself has created.

Its really a very very sick experiment.

Sun, 10/21/2012 - 12:37 | 2907835 warchopper
warchopper's picture

COLLAPSE! Just get it over with.

Sun, 10/21/2012 - 12:54 | 2907858 timbo_em
timbo_em's picture

It is important to notice that the bailout fund itself as well as the money requested by the regions only concerns 2012. It's going to get much worse in 2013 and even worser as the central government gets deeper into trouble by the minute. Madrid and maybe two or three other regions will be able to go without assistance but all other regions are more or less broke.

Sun, 10/21/2012 - 13:22 | 2907859 Reptil
Reptil's picture

Quite the "colored" report from the supposedly "impartial press" this AP article. The Basque region wasn't wrecked by "decades of violence", the political process was numbed by it, in a powerstruggle between regional and national forces. Of course there were bloody attacks, against exploitation of the Basque region, but also against political opposition. The fishing industry of the north was wrecked because the PP president Aznar ordered a sinking tanker loaded with crude towards their coast (rich fishing grounds) against the advise of the dutch salvage company who were already on the case. The ETA, which has a terrorist/rebel faction which is violent, also has a non-violent political arm. They'll do well since the central government has chosen the side of the banks. Is that good for "Spain"? No of course not, it's now in danger of fragmenting, after cease-fire ended the ETA violence some years ago. Great job Van Rompuy, the dismanteling of the nationstate is in full swing.

Sun, 10/21/2012 - 13:37 | 2907911 THE DORK OF CORK
THE DORK OF CORK's picture
EIB AVE Y VASCA

Description

Construction of high-speed rail line between Vitoria, Bilbao and San Sebastián in priority TEN-T corridor 3 connecting Iberian Peninsula to France

Amount

EUR 1,000,000,000

Sector(s)

Countries

  • SpainEUR 1,000,000,000

Signature date(s)

  • 27/07/2012 : EUR  250,000,000
  • 27/09/2012 : EUR  250,000,000
  • 22/06/2012 : EUR  500,000,000
  • and yet no money to run the existing rail systems............................whats wrong with this picture ?
  • Spain needs a Fiat King.

 

 

 

 

A

Sun, 10/21/2012 - 13:50 | 2907936 THE DORK OF CORK
THE DORK OF CORK's picture
MALAGA- LAS PEDRIZAS PPP

Description

Construction of new 24km section of AP46 motorway, between Malaga and Las Pedrizas in Andalusia

Amount

EUR 130,125,000

Sector(s)

Countries

  • SpainEUR 130,125,000

Signature date(s)

  • 27/10/2011 : EUR  40,750,000
  • 14/06/2012 : EUR  39,375,000
  • 29/09/2011 : EUR  50,000,000

So they are building a new motorway in Malaga when car sales are crashing........................meanwhile they don't have a couple of million to run the existing tram service in Malaga.

Something is deeply wrong in Spain and in Europe.

It builds stuff all over the gaff , then says we don't have enough tokens to sevice the existing built envoirment and then moves on to another project..............

Sun, 10/21/2012 - 15:55 | 2908159 Don Diego
Don Diego's picture

you wrongly assume that infrastructure projects in Spain are undertaken in the taxpayers' interests. The fact is that the larger projects leave fatter bribes to the politicians that select them.

Sun, 10/21/2012 - 17:08 | 2908266 THE DORK OF CORK
THE DORK OF CORK's picture

@Don

Why do you think that I assume this ?

I am not a fan of many of these projects...........but its a question of what can be saved after the event.

Local public transport declines are a function of a lack of money supply withen the system although Malaga is probally suffering a external tourist shock also............anyway if you want to save real resourses the private car gets priced out of existence.

Remember at any given time a economy can only produce a certain amount of wealth - once you realise this the question is not about the availability of symbolic money but a question of real resourse allocation.

Rail & tram is typically more labour intensive rather then energy intensive.........the unemployment problem in Spain and Ireland is the result of a lack of domestic fiat currency.

Sun, 10/21/2012 - 15:56 | 2908165 stateside
stateside's picture

Astur Gold (AST in Canada) is trying to develop a 2 million ounce gold deposit in Asturias but the left wing government won't give them a  permit even though over 70% of the local community want the mine to go forward.  This will create 100's of new jobs and millions of much needed tax revenue yet the environmentalists and the left wing government say NO.  Much easier to beg for free bailout funds.  The Obama administration would be oh so proud.

 

stateside

Sun, 10/21/2012 - 20:48 | 2908620 q99x2
q99x2's picture

I just checked out the Spanish stock market for this year. Holy crap its on a tear like no tomorrow. Their economy must be doing fantastic.

Forgot that is what they used to indicate in a general way.

Stock markets are now a way to funnel money to the rich from the Germans and other sheeple. 

Sun, 10/21/2012 - 21:16 | 2908669 Tim Brasco
Tim Brasco's picture

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