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The precedent established by the way the euro area decided to help the Spanish banking system claims immediately woke up the other strapped states to seek to renegotiate the terms on which were supported their national economies.
Greece hopes most
As might be expected and, first Greece announced that it will require changing the parameters of support plan for 130 billion. They did not the authorities and the mainstream parties in the country who immediately joined the case in his campaign. Because this was just days before crucial for its future parliamentary elections on Sunday, the call is taken as a signal that whoever wins will follow claims to Brussels to ease the criteria under which international creditors evaluate whether Greece deserves another installment.
Radical Left (SYRIZA) said the incident fully support their assessment that the anti-crisis program for the country has failed, there are deep structural crisis in the euro area is now open new prospects for Greece. Conservative leader Antonis Samaras said that Spanish trade has shown the meaning of negotiation rather than confrontation with Brussels and European partners. Socialist PASOK Evangelos Venizelos said that the Spanish model actually brings Europe a bulwark against a possible failure of Greece in the euro area. Ordinary Greeks quoted by Reuters, said it was too late to renegotiate their country, “because we have made in laboratory mice of the euro area.”
Cyprus will be next
On Monday, Cyprus send the strongest signal yet that it will be the next country in the eurozone, requested international assistance to banks. “The situation is urgent. We know that the recapitalization of our banks should be completed by June 30. When assistance is requested, the calculations are made for possible future needs,” said Finance Minister Vasos Shiarli. Most problematic is the second largest Cyprus Popular Bank, which will take another 1.8 billion euros, equivalent to 10% of GDP. So far, neither Brussels nor the IMF had received a formal request from Nicosia, which in practice than a year is cut off from international capital markets. The country is a paltry 0.2% of euro area economy, but is closely associated with Greece and the time for requesting assistance directly related to the elections there. Most likely this will happen on 23-24 June, ie week after the vote of the Greeks.
Ireland’s wrong, Portugal suffers
The authorities in Dublin are under pressure to renegotiate the EU aid and the IMF, after struggling with the crisis, but their results are bad news sink in the euro area. The government insisted yesterday that Spain has not received a better deal from Europe. “They got exactly the same. It is a lie that Spain gets cheap credits from us,” said Deputy Finance Minister Brian Hayes. In 2010 Ireland signed a deal for 85 billion loan support for on average 3.7% interest.
Indeed, the government has somewhat guilty, because in recent weeks only create expectations that the rescue of Spain can bring better conditions to refinance part of the tens of billions of euros to recapitalize Irish banks.
After Greece, the most serious problems is Portuguese, but there is relative optimism is based on another – surprise investors tolerance to anti-crisis measures. This could be used as a plus of Lisbon, if Greece leave the euro area and the eyes focus on the downstream periphery of the problem.
Italy – big question
Spanish trade increases and pressure on technocratic government of Mario Monti in Rome. “That does not mean that there will be an attack against the Italian market, but investors will monitor each News Bits, before deciding whether to buy or sell Italian debt,” said Nicholas Marinella in London Glendevon King Asset Management. Debts of the country exceed 2 trillion and two bars more than Spain.