Spanish Bank Bailout a Welcome Relief for U.S. Investors
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With the situation in Spain rapidly deteriorating going into the weekend and threatening to destabilize the fragile financial situation in Europe, eurozone finance ministers agreed on Saturday to a EUR 100 billion ($125 billion) recapitalization of the Spanish banking system. The amount was higher than the $50-$100 billion figures being thrown around last week.
The news was just the latest in what seems like a never-ending bout of bailouts and bad news from the area.
Investors here in the U.S. will likely view the news positively as it takes potential 'Spanish bank runs' out of the headlines, at least for now. Already, markets in Asia are moving higher with the Nikkei up 1.9 percent and the Hang Seng up 2 percent.
Spanish leaders praised the bailout, saying, "The European project, the future of the euro and our banking system all won new credibility yesterday." However, in the same breath, they warned that economic conditions in the country look dire for the year with growth falling 1.7 percent, and unemployment rising.
With this weekend's bailout taking Spanish banks out of the Defcon 1, attention will again turn again toward Greece with its upcoming elections on June 17th. The elections could decide if the troubled country will stay in the Eurozone or be its first casualty.
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The news was just the latest in what seems like a never-ending bout of bailouts and bad news from the area.
Investors here in the U.S. will likely view the news positively as it takes potential 'Spanish bank runs' out of the headlines, at least for now. Already, markets in Asia are moving higher with the Nikkei up 1.9 percent and the Hang Seng up 2 percent.
Spanish leaders praised the bailout, saying, "The European project, the future of the euro and our banking system all won new credibility yesterday." However, in the same breath, they warned that economic conditions in the country look dire for the year with growth falling 1.7 percent, and unemployment rising.
With this weekend's bailout taking Spanish banks out of the Defcon 1, attention will again turn again toward Greece with its upcoming elections on June 17th. The elections could decide if the troubled country will stay in the Eurozone or be its first casualty.
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