And so those lining up at the bailout trough are now 4: remember all those lies Spain spoon-fed the gullible press that it didn't need a European bailout as recently as yesterday? You can now forget them. From Reuters: "Spain said on Tuesday that credit markets were closing to the euro zone's fourth biggest economy as finance chiefs of the Group of Seven major economies were to hold emergency talks on the currency bloc's worsening debt crisis. Treasury Minister Cristobal Montoro sent out the dramatic distress signal in a radio interview about the impact of his country's banking crisis on government borrowing, saying that at current rates, financial markets were effectively shut to Spain. Montoro said Spanish banks should be recapitalised through European mechanisms, departing from the previous government line that Spain could raise the money on its own and and prompting the Madrid stock market to rise. But his comments on Spain's borrowing sent the euro down after the 17-nation European currency earlier hit a one-week high against the dollar on expectations that a conference call of G7 finance ministers and central bankers may hasten bold action." Well, Germany got its wish: it got Spain to admit it is broke. Just as it wanted - because remember: all Germany is, is a true lender of last resort unlike the ECB: after all they are the decision makers. And Germany knows very well that it needs Europe desperate when it is forced to accept any conditions to the German DIP loan that Schrodinger Schauble proposes. Which means forget anything positive will come out of the G7, and certainly forget anything actionable will come out of the ECB's June 7 meeting. If anything, things will first get much worse, before things get better. And finally, don't forget just who benefits the most from EURUSD at parity or lower... That's right: Germany.
Speaking of June 7, this may well be the D-Day for Europe, but not because of the ECB. Recall, that "Spain will test the market on Thursday by issuing between 1 billion euros ($1.24 billion) and 2 billion euros in medium- and long-term bonds at auction." Yep - Spain issuing 10 year bonds in 48 hours. Best of luck gentlemen - and this just as the country formally announced it is insolvent. Zero Hedge suggests that Spain promptly cancel the Thursday auction before it is too late.
More from Reuters:
Emilio Botin, chairman of the nation's biggest bank, Banco Santander told Reuters Spanish banks needed about 40 billion euros in additional capital, adding that "there is no financial crisis in Spain". Montoro said the figures were "perfectly accessible".
But his dramatisation of the debt situation set a stark backdrop for the conference call of the United States, Canada, Japan, Germany, France, Italy and Britain, plus European Union officials, which two G7 sources said would start at 1100 GMT.
Montoro's comments appeared aimed at pressuring the ECB and EU paymaster Germany to find ways of intervening. But the central bank has so far shunned calls to resume purchases of Spanish government bonds, and Berlin has said it is up to Madrid to decided whether to apply for assistance if it needs help.
Speaking of the G7, and confirming that Europe is nothing but a total basket case, Reuters informs us again, that instead of broke Europe appeasing its only source of funds, they are.... bashing it.
Germany is likely to come under severe pressure to do more to stimulate growth and help the euro zone on a conference call between finance ministers of the world's major economies on Tuesday, a senior G7 source told Reuters.
"It will become a Germany bashing sesssion," the source said, requesting anonymity due to the confidential nature of the call.
The source added that ministers would discuss the situation in Spain on the call and confirmed that Germany was pushing Spain to accept an EU rescue to help it recapitalise its stricken banks.
"They don't want to. They are too proud. It's fatal hubris," the source said of the government in Madrid.
They just did.
Finally, regarding the latest myth that there is enough actual funding in various emergency funding mechanisms to support Spain and Italy, we got back to yesterday and bust this particular mth, courtesy of Bridgewater.