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Spain's Catalonia Region Demands €5 Billion Bailout, Will Not Tolerate Conditions

Tyler Durden's picture





 

Beggars can once again be choosers. In other news, non-news (the Catalan bailout was announced at least two times before) is news again, and magically drives the amnesiac market all over again.

From Cinco Dias, courtesy of the always amusing google translate, which makes any news, no matter how tragic, quite hilarious without fail:

Catalonia 5,023,000 calls but will not accept the State Policies

 

The Catalan government today applied to join the Spanish Government Autonomous Liquidity Fund, which will borrow EUR 5.023 million, but has warned he will not accept "political conditions" to provide some resources "that are of the Catalans".

 

The Catalan government spokesman Francesc Homs, has stated that the Government will use these resources - the fund is endowed with 18,000 million euros to meet the budget deficit that is required (1.5% of GDP by end 2012 ) and to refinance "maturities outstanding" between now and year end.

 

The Catalan government has finalized this application to join the Liquidity Fund at its first meeting after the summer break.  

Needless to say, Germans, who are ultimately indirectly paying for this unconditional party, are delighted.

 


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Tue, 08/28/2012 - 08:28 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

Demand? Perhaps they should consider suggestioning?

 

There's no brown M&Ms in the green room.....I can not tolerate these working conditions!

Tue, 08/28/2012 - 08:31 | Link to Comment malikai
malikai's picture

Perhaps Catalonia should pay attention to their little village Rasquera's debt solution plan, growing weed:

http://www.bbc.co.uk/news/world-europe-17668617

Tue, 08/28/2012 - 08:34 | Link to Comment idea_hamster
idea_hamster's picture

Perhaps Madrid should start to consider all those seperatist and independence movements in Catalonia.

"Hmm...unconditional $5B bailout? Or maybe just 'buh-bye'"!

Tue, 08/28/2012 - 08:37 | Link to Comment magpie
magpie's picture

If you can't even throw Greece out the EZ, how are they going to throw a region out of Spain

Tue, 08/28/2012 - 08:39 | Link to Comment Manthong
Manthong's picture

Do they have any mines to barricade themselves with explosives in?

 

Tue, 08/28/2012 - 08:43 | Link to Comment magpie
magpie's picture

Heh, even with a suicide pact the last times they tried to break loose they needed foreign armies to do it for them.

Tue, 08/28/2012 - 08:50 | Link to Comment laozi
laozi's picture

€ 5M ? Seriously. That's nothing. I will not read any article talking about who is getting a million. Get the fuck out of here!

Tue, 08/28/2012 - 08:53 | Link to Comment Stackers
Stackers's picture

Everytime I read these types of artcls. I keep having flash backs of the Blazing Saddles scene where Cleavon Little is holding a gun to his own head and threatening "Anyone moves and the nigger gets it"

Tue, 08/28/2012 - 09:44 | Link to Comment cahadjis
cahadjis's picture

No, 5 billion. The dot is spanish notation for comma. 5023 million euros.

 

To confuse you more, "billion" in spanish means trillion.

Tue, 08/28/2012 - 09:07 | Link to Comment slaughterer
slaughterer's picture

The metastases of bailouts will end all history and negativity for ever.  

Tue, 08/28/2012 - 09:53 | Link to Comment caconhma
caconhma's picture

Thanks to Germany traitors-politicians, Germany will be ruined both economically and politically.

Tue, 08/28/2012 - 11:55 | Link to Comment The Reich
The Reich's picture

is coming over you in the very near future.

Tue, 08/28/2012 - 08:45 | Link to Comment idea_hamster
idea_hamster's picture

Expelling Greece from the Euro is like kicking an unemployed 20-something out of the parents' basement apartment -- he doesn't want to leave and the parents are conflicted.

Catalonia has a well-developed independence movement that has a 100-year-old body of literature, its own language, and growing public approval.  If Madrid even suggests that it might be OK, the Catalan idependence tide would latch onto this as a "bargain" -- and they'd be right. Catalonia gets independence; Madrid saves a $5B bailout plus all the follow-on bailouts that no one is admitting to yet.

Tue, 08/28/2012 - 08:49 | Link to Comment magpie
magpie's picture

Well, if that's settled they still have to decide whether to keep the Euro or not

Tue, 08/28/2012 - 09:21 | Link to Comment sessinpo
sessinpo's picture

And why would TPTB want to throw Greece out. Greece is like a fish on a hook, a hook so deep down the throat, it can't get off it. Let Greece or anyone else struggle all they want. In fact the more they struggle and borrow more, the more Greece is on the hook. More leverage later on for the central planners.

 

All these plans to save various countries and regions are really plans to get a stronger hold and control of those finances. That's why we have constant drama back and forth without resolution (until it can't be resolved anymore). It's like the guy that goes to the mob to borrow $10k.  A year later, you find him in debt to the mob for $100k. Eventually the mob comes and takes it all from you, your assets and your life.

Tue, 08/28/2012 - 10:29 | Link to Comment ElvisDog
ElvisDog's picture

TPTB will keep Greece in the EU as long as they are able to stripmine more wealth, either real or future obligations, from Greece than the money they are putting into Greece. Simple as that. The mafia reference is appropriate, because this is "not personal, just business".

Tue, 08/28/2012 - 08:44 | Link to Comment disabledvet
disabledvet's picture

You can simplistically compare this to extortion...or you can stop being an idiot for a moment and understand the "power of the center" under direct attack from the Regions. Big deal...move along sheeple!

Tue, 08/28/2012 - 13:17 | Link to Comment drysafe
drysafe's picture

The thing is, Catalonia (which includes Barcelona) is the most advanced region of Spain economically (arguably more advanced than Madrid, despite what many consider an unfair, center-skewed distribution pattern for federal tax revenues).

If they lose this economic engine, the Basque region (another bright spot on the Spanish map) will probably follow and pretty soon what Madrid is going to be left with to govern will be only the perpetually poor Galicia and Andalusia.

And, politically, this is a non-starter. Spain will sooner descend into a civil war than follow an orderly split like Czechoslovakia.

Tue, 08/28/2012 - 08:26 | Link to Comment maxmad
maxmad's picture

"This is the freakin Catalina Wine Mixer" 

Tue, 08/28/2012 - 09:39 | Link to Comment The Chief
The Chief's picture

"Pah!"

Tue, 08/28/2012 - 08:27 | Link to Comment Jason T
Jason T's picture

give then the "soup nazi" treatment: "you want no conditions?, no bailout for you!  Next!"

Tue, 08/28/2012 - 08:27 | Link to Comment malikai
malikai's picture

Just fucking pay me. Now.

Regards,

Catalonia

Tue, 08/28/2012 - 08:28 | Link to Comment maxmad
maxmad's picture

Collapse ON!

Tue, 08/28/2012 - 08:29 | Link to Comment magpie
magpie's picture

You know the drill, rant around, Merkel in SS uniform, then line up at the ECB after a Draghi 'all clear'.

Tue, 08/28/2012 - 08:30 | Link to Comment GS-DickinDaMuppets
GS-DickinDaMuppets's picture

WTF - When will this Sh!t finally end,

 

...doing GOD's work...GS-DickinDaMuppets

Tue, 08/28/2012 - 08:30 | Link to Comment Neethgie
Neethgie's picture

catalonia is a socialist hell hole, who have spent all their money now expect more..

Tue, 08/28/2012 - 09:33 | Link to Comment SilverNoob
SilverNoob's picture

Exactly. Give us 5 billion or else. No conditions, blow jobs or reach arounds. 

Catalan chutzpah. Paella munching mofos.

Tue, 08/28/2012 - 12:43 | Link to Comment FeralSerf
FeralSerf's picture

"Hell hole" is a mischaracterization of Barcelona.  

Tue, 08/28/2012 - 08:31 | Link to Comment Chief_Illiniwek
Chief_Illiniwek's picture

Until they hold their breath, these demands cannot be taken seriously.

Tue, 08/28/2012 - 08:35 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

Don't push it little mister....cause they'll totally do it!!!

 

Tue, 08/28/2012 - 08:33 | Link to Comment Anasteus
Anasteus's picture

The original article refers to 5 million, not 5 billion as titled. 5 million is nothing, it's not worth mentioning.

Tue, 08/28/2012 - 08:36 | Link to Comment Racer
Racer's picture

Can I have some 'nothing' please

Tue, 08/28/2012 - 08:54 | Link to Comment ZeroAvatar
ZeroAvatar's picture

Gibs me dat.

Tue, 08/28/2012 - 08:45 | Link to Comment Anasteus
Anasteus's picture

No, no, the title is ok, it's actually 5 billion. The google translator confuses comma/dot delimiter.

Tue, 08/28/2012 - 08:56 | Link to Comment laozi
laozi's picture

Oh. I reacted to that too. 5M would not even pay for ONE of Berlusconis bunga bunga parties.

Tue, 08/28/2012 - 08:46 | Link to Comment Non Passaran
Non Passaran's picture

Okay you moron, go to Wikipedia or somewhere and learn about decimal points in continental Europe.

Tue, 08/28/2012 - 08:49 | Link to Comment Anasteus
Anasteus's picture

I am directly from Europe...

Tue, 08/28/2012 - 08:51 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

No kidding? Can I have some of your free money?

 

Tue, 08/28/2012 - 08:58 | Link to Comment laozi
laozi's picture

Stop right there Sir. You have to wait for QE3 like all the rest.

Tue, 08/28/2012 - 09:26 | Link to Comment sessinpo
sessinpo's picture

That explains a lot.

Tue, 08/28/2012 - 09:42 | Link to Comment cahadjis
cahadjis's picture

Shame you not knowing that 5.023 is same as 5023 in european notation. Confusing i know but it's how it is.

Tue, 08/28/2012 - 08:47 | Link to Comment SAME AS IT EVER WAS
SAME AS IT EVER WAS's picture

In today's "brother can you spare a bailout" world, 5 billion isn't nothing either.

Tue, 08/28/2012 - 08:56 | Link to Comment Ar-Pharazôn
Ar-Pharazôn's picture

ehmmmmm perhaps you should consider to go back to school............... reading lessons especially

Tue, 08/28/2012 - 09:28 | Link to Comment SilverNoob
SilverNoob's picture

No Senor, no.

 

The original article mentions 

"5.023 millones de euros"

The Spanish don't seem to use commas to denote thousands, but use the decimal, which is rather confusing.

That's 5.023 billion Euros. What do you think they would do with 5 million euros? 

Tue, 08/28/2012 - 08:34 | Link to Comment orangegeek
orangegeek's picture

And the Euro is up again this morning. 

 

Insolvent countries - more bullish news.

Tue, 08/28/2012 - 08:38 | Link to Comment JJSF
JJSF's picture

The core and peripheral are completely seperating

Countries like Czech Republic and Poland's currencies are getting hit when the euro gets hit.. But their economies are much healthier.. Buyying these currencies has been my thing for about 3 weeks now..

http://mlatrader.com/czk-analysis-close-to-support-at-median-line-czk-a0...

Tue, 08/28/2012 - 08:44 | Link to Comment Non Passaran
Non Passaran's picture

Hmmm couldn't you make the same argument about CHF?
What are they going to do when the rest crashes? Export their way out?
(I'm lazy to check but I wouldn't be surprised of their CB's had some sort of peg to the Euro).

Tue, 08/28/2012 - 08:59 | Link to Comment Ar-Pharazôn
Ar-Pharazôn's picture

CHF is pegged to the Euro at current rate of 1 Euro = min. 1.20 CHF

Tue, 08/28/2012 - 09:02 | Link to Comment Ar-Pharazôn
Ar-Pharazôn's picture

as a swiss citizien i would say that if EU implodes, we will experience our baddest times since WWII

Tue, 08/28/2012 - 10:15 | Link to Comment SilverNoob
SilverNoob's picture

That's so shit for the swiss. Hope you have plenty of those lil' gold and silver bars!

The Sterling(I am UK resident) and the Norwegian Krone (I hold both for fluidity) are not pegged to the Euro and the Sterling is getting yearly highs against the Euro. Who's bright idea was it to peg the CHF to the Euro?

Tue, 08/28/2012 - 08:39 | Link to Comment Catullus
Catullus's picture

Catalonia, just break away from the Spanish Kingdom and default on your debts. 

Tue, 08/28/2012 - 08:44 | Link to Comment doomandbloom
doomandbloom's picture

9! 9! 9!

Tue, 08/28/2012 - 10:07 | Link to Comment monad
monad's picture

Mine! Mine! Mine! 

Tue, 08/28/2012 - 08:46 | Link to Comment Waydown
Waydown's picture

Correction: The original article refers to 5.023 million euro. That's 5 billion anglo-saxon monedas

Tue, 08/28/2012 - 08:50 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

Hell.....we can just pull that out of petty cash.

 

Tue, 08/28/2012 - 08:49 | Link to Comment Dr. Engali
Dr. Engali's picture

The entitlement mentality runs deep in the western culture that's for sure. I'd tell them to take a flying leap,but I'm not a banker who is afraid I might take a haircut. So they will probably get the money.

Tue, 08/28/2012 - 08:56 | Link to Comment SheepDog-One
SheepDog-One's picture

5 million Euro? Hell thats not even enough to keep the Fed pumping for half a microsecond.

Tue, 08/28/2012 - 08:59 | Link to Comment SAME AS IT EVER WAS
SAME AS IT EVER WAS's picture

The ponzo markets remind me of drug addicts looking for a reason to get high. "Oh look, the sky is blue-let's get high."

The PPI is down .00056% over last year, the Dow spikes 200 points. What fucking non-sense!

Tue, 08/28/2012 - 09:10 | Link to Comment cosmictrainwreck
cosmictrainwreck's picture

"sky is blue" HA!

Tue, 08/28/2012 - 09:09 | Link to Comment eddiebe
eddiebe's picture

Is it 5 million or 5 billion?

Tue, 08/28/2012 - 09:15 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

 

Just give us whatever you got......dig deep......it's going for a good cause.

 

Tue, 08/28/2012 - 09:37 | Link to Comment sessinpo
sessinpo's picture

You remind me of my sister.

One day she read a medical story how eating eggs was bad for you.

The next day, she read a story how eating eggs was good for you.

 

She then exclaimed. "Why don't they tell me what I should do? Are eggs bad for me or good for me?"

 

I just smiled and ignored her. I'm smiling at you.

Tue, 08/28/2012 - 09:46 | Link to Comment cahadjis
cahadjis's picture

5 euros and 2.3 cents

Tue, 08/28/2012 - 09:49 | Link to Comment Anasteus
Anasteus's picture

It is 5 billion, eddiebe.

Tue, 08/28/2012 - 09:25 | Link to Comment Blasé Faire
Blasé Faire's picture

They've been working on Sagrada Familia for 130 years.  They just need a nudge to get it done.  The tourism it attracts will let them pay off that debt in no time!

Tue, 08/28/2012 - 09:33 | Link to Comment Nussi34
Nussi34's picture

Just bomb the PIIGSF and get it over with!

Tue, 08/28/2012 - 09:35 | Link to Comment TrustWho
TrustWho's picture

Here we go. People were concerned about the break-up of Europe and now the powers to be must be worried about the break-up of the European states.

THe arrogant eggheads created the Euro to reduce the possibility of another European war. Like most eggheads, their technical analysis and forecast was wrong. In fact their decision to force the Euro on the Europeans has increased the possibility of a European war. The eggheads who did this should be held accountable and at the very least, their credibility should drop to absolute zero.

Tue, 08/28/2012 - 09:52 | Link to Comment Too Big 2
Too Big 2's picture

The only problem with accountability is that no one from the top down are holding anyone accountable.....The Euro has failed, the socialist policies of Europe and the USA have failed, our President has failed to lead, our attorney general, SEC, etc have have all failed to prosecute.....hell, in the midst of the worst budget deficits in the history of the planet and unemployment over 8% (as reported) we can't even agree to enforce laws which would help people who are here legally to get jobs....here in California and the USA they blame the budget problems on people who pay taxes on not paying enough taxes!  Beautiful.... Accountability????? Who's on 1st?   

Tue, 08/28/2012 - 12:02 | Link to Comment TrustWho
TrustWho's picture

How can good people fight a corrupted system? When the law serves corruption, choices are limited. As I wrote in Santelli's counterfeiting article:

If you want to legally counterfeit, got to be a member of Fed club,

If you want to legally steal, got to be member of TBTF bank club,

If you want to legally practice organized crime, got to be member of US/state justice clubs,

If you want to make a fortune from legal bribery, got to be member local/state/federal legislative/executive/judicial clubs.

Sorry to see the morality of our leaders be corrupted by money, but just what happens once you cross the line and become a Banana Republic.

I know all banks, all lawyers, all judges, all legislative people are not corrupt, but the good people inside these institutions must bring light to their corrupted peers. If not, they are corrupted by association.

LOOKING FOR SOLUTIONS? Tyler has an excellent solution with this transparency, but I would bet the corrupted people in power would like to shut this site down. Just speculation on my part....

Tue, 08/28/2012 - 10:26 | Link to Comment Anasteus
Anasteus's picture

But I am quite comfortable with the Catalonia's decision not to tolerate any conditions. What for, after all? Should the people always pay others' bills, support screwed and corrupt policy, banking gamblers or political shell games? If one has to undergo austerity then certainly not for preserving the status quo. Catalonia has put it clearly 'Enough! It's your job to manage things. If you can waste huge money for your sharades, you'll certainly find some for people. Now go, start doing your job and don't bother us with details.'

Tue, 08/28/2012 - 11:23 | Link to Comment Snakeeyes
Snakeeyes's picture

California, i mean Catalonia, should look at the macro numbers for Spain as a whole. How can they afford it?

http://confoundedinterest.wordpress.com/2012/08/28/the-pain-in-spain-continues-real-gdp-declines-1-3-house-prices-continue-to-decline/

Tue, 08/28/2012 - 13:23 | Link to Comment Dareconomics
Dareconomics's picture

Catalonia Seeks $6.3 Billion From Spain Regional Rescue Fund - Bloomberg.

Spain will have to request a bailout sometime this year. The Spanish budget situation is much worse than the mainstream believes and has been steadily deteriorating all year. 

In March, the Spanish raised the target on its 2012 budget deficit to 5.8% from 4.4%:

http://online.wsj.com/article/SB1000142405297020398660457725669376587463...

That number was much too optimistic as we learned two months later that the budget deficit would be 6.3%:

http://www.bloomberg.com/news/2012-05-11/spain-will-miss-budget-deficit-...

Finally, the Spanish got the numbers right. Yea! Wine and tapas for everyone! After everyone woke up from their wine and tapas induced siesta, they realized that they had more work to do.

The budget deficit for the first half of the year was actually 4.04% (love that precision). If we double this number, we arrive at 8.1% for the year. Of course, the Spanish aren't telling us everything. The regions are expected to run a 4% budget deficit for the year, and not all of this number is included in the worsening budget deficit. Let's pretend that there is a good accountant working somewhere in the Spanish Finance Ministry who actually accounted for half of the regional debt in the projections. If that is the case, then we will only add half of the regional projected deficit to the total for a whopping 10.1% of GDP.

If you think this number is crazy, then look at its history for the year:

  • 4.4% in March raised 1.4% to 5.8%.
  • 5.8% in May raised .5% to 6.3%
  • Still 6.3% in August but running at a rate of 8.1% for an increase of 1.8%

In just about five months, the official number increased 3.7 points. That's an 84% increase or 17% a month, not compounded. If we extrapolate this figure for the last four months, we get 68%. An increase of this amount over the last four months of the year give us an actual budget deficit of 13% of GDP, so my 10.1% back of the envelope calculation is actually quite conservative.

Don't worry. This problem can easily be papered over with a bond buying program and vainglorious boasting by Super Mario. 

dareconomics.wordpress.com

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