When it's financial aid of course !
Spain has eaten humble pie and became the fourth and largest country to ask Europe to rescue its failing banks.
EU leaders hope the loan of up to 100 billion euros (£81 billion) that Spain's finance minister denied was a bailout, will stabilise a financial crisis that threatens to break apart the eurozone.
Saturday's rescue offer follows growing pressure from international investors and the Obama administration and comes a week before elections in Greece, whose voters could decide whether the country leaves the euro.
The Spanish acceptance of aid for its banks is a huge embarrassment for prime minister Mariano Rajoy, who insisted just 10 days ago that the banking sector would not need a bailout. He was elected in November and walked right into a hurricane.
Europe's widening recession and financial crisis has hurt companies and investors around the world. Providing a financial lifeline to Spanish banks is likely to relieve anxiety on the Spanish economy - which is five times larger than Greece's - and on markets concerned about the country's ability to pay its way.
Spain's economy minister Luis de Guindos announced the deal after an emergency conference call with eurozone financial leaders yesterday, but insisted it was financial aid, not a bailout. He said the aid would go to the banking sector only and would not come with new austerity conditions attached for the economy in general - conditions that have been an integral part of previous bailouts to Portugal, Ireland and Greece.
The exact figure of the bailout has not yet been decided. Mr De Guindos said the country was waiting until independent audits of the country's banking sector had been carried out before asking for a specific amount. The audits are expected by June 21 at the latest. He did say, however, that Spain would request enough money for recapitalisation, plus a safety margin that would be "significant".
With markets in turmoil, Mr de Guindos said the government's efforts to shore up the financial sector "must be completed with the necessary resources to finance the needs of recapitalisation".
Finance ministers of the 17 countries that use the euro said the money would be fed directly into a fund Spain set up to recapitalise its banks, but underscored that the Spanish government was ultimately responsible for the loan. However, that plan allows Spain to avoid making the onerous commitments that Greece, Ireland and Portugal were forced into when they sought their rescues.
Instead, the eurozone statement said that it expected Spain's banking sector to implement reforms and that Spain would be held to its previous commitments to reform its labour market and manage its deficit. The statement said that meant the cost could reach 100 billion euros.
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Baldrick: "What I want to know, Sir is, before there was a Euro there were lots of different types of money that different people used. And now there's only one type of money that the foreign people use. And what I want to know is, how did we get from one state of affairs to the other state of affairs"
Blackadder: "Baldrick. Do you mean, how did the Euro start?"
Baldrick: "Yes Sir"
Blackadder: "Well, you see Baldrick, back in the 1980s there were many different countries all running their own finances and using different types of money. On one side you had the major economies of France, Belgium,Holland and Germany, and on the other, the weaker nations of Spain, Greece, Ireland, Italy and Portugal. They got together and decided that it would be much easier for everyone if they could all use the same money, have one Central Bank, and belong to one large club where everyone would be happy. This meant that there could never be a situation whereby financial meltdown would lead to social unrest, wars and crises".
Baldrick: "But this is sort of a crisis, isn't it Sir?".
Blackadder: "That's right Baldrick. You see, there was only one slight flaw with the plan".
Baldrick: "What was that then, Sir?"
Blackadder: "It was bollocks".
Doubt they will be buying anything else up for some time!
But rest easy. The UK will find more billions to pay via the IMF and British citizens will be royally shafted as usual.
So don't worry!
Secondly the problem has been that the European Central Bank has been precluded from doing the job of a central bank by easing the stresses of the banking system.
Our Government massively bailed out our banking sector via the B of E, in addition to which the B of E has been creating money by Quantitative Easing to help add liquidity in financial markets.
The problem here is that the structure of the Euro. If you are going to have a single currency, the central bank must be able to act like a central bank. The Germans have been holding this all up. Germany has massively benefited from the Euro and it seems, finally, that they have moved to allow this to happen.
This is a loan to the Spanish banking sector just like the ones we loaned to our banking sector.
Like you say, Geany has benefitted massively from the Euro, to the detriment of the nations now being bailed out - they don't seem to be able to acknowledge this from their high horse.
I was pro Euro and still am but of course you have to take out the lying and mis management factor. The greeks lied to join the euro and the rest of europe must have known.
Reason why is because we are borrowing more money than we are recieving and we are still contributing to the IMF. We need to cut borrowing dramatically and reduce our own contribution to the IMF.
As for the eurozone, I think this whole European union will collaspe because of the Euro currency. It will never going to work because all European countries have different economics and countries like Greece, Spain and Portugal who are in a bad state, have downgraded the currency which has taken the other countries down. Currently, our Pound rating has been growing stronger against the Euro because of this and thank christ we never joined the Euro because I believe our ecomony would be worse off now than it is today. I really do hope for Europe's interests, they go back to their own currency, de-value and run their own economy otherwise this will get worse for everyone.
The one thing politicians rarely do, is take responsibility for their own actions and reactions.
The UK might borrow at 3% as you state but I reckon Charlton are more likely to win the premiership than the UK actually physically recoup the 9% you mention!
Hence my concern.
With the greatest respect to all, this is not a sub-prime failure, this has been a failure resulting from the disastrous de-regulation of banking and the removal of controls over currency exchanges which started in the late 1970's.
Casino banking has been permitted on a huge scale. Some argue that allowed growth to occur but whilst economies and wealth of average citizens grew a bit, the wealth of the super-rich grew massively.
Major western economies threw out the old Keynesian controls and introduced casino economics. Letting people gamble with others money with little or no regulation for massive personal gain has been the problem.
Most blame the bankers because they carried out these massive gambles, but I blame collectively the political doctrine which allowed that to happen and then the spineless toadying of successive politicians embodied by Messrs Brown and Balls who turned a blind eye to the massive bust which was coming.
We are where we are and there is little room for manoeuvre for our Government given the hand dealt them. I read that people like Balls believe that the classic Keynesian approach is required now to pump prime the economy to support growth by spending especially on capital projects, with a temporary cut in VAT. He has been calling for this now for two years. It has been important for the Government, at least in its rhetoric, to stick to its plans. Of course plan B was built into plan A anyway as there are automatic stablilisers for extra spending already in place if growth stalled as it has.
Osbourne bemoaning the problems of the Euro zone in its drag on our growth is understandable but its only part of the issue. Germany for example has strong growth which is counterbalanced by recession in other Euro countries. Germany is a very strong skills and manufacturing based economy. i.e. they design and build things. Our problem is very much based around from where is growth coming. We have a structural problem of over-reliance on the financial sector and so we need structural change to a more manufacturing and skills based economy. That is why securing sustainable growth in the UK is much harder.
There are no simple causes or solutions here. Blaming it on Labours record and the Euro is facile and opportunistic just as Balls and co calling for a growth strategy for extra borrowing and tax cuts to pump prime spending is similarly opportunistic. The reasons why we are where we are go much further back and the solutions are much more long-term and structural.
France, the UK and some others have been calling for the creation of Euro-bonds now for some time. The Germans have set their face against it.
It may be counter-intuitive to the Germans but the Euro's chance of survival, the long-term health of Germany's Europe's and the World's economy will be massively improved by allowing the European Central Bank to create Euro- bonds backed by all of the Euro states including Germany. Maybe that political penny has begun to drop. Germany are calling for greater political integration as a price for further Euro reforms. They need something to show for their financial backing of the only real course of action that can save the Euro now.
Germany must have known this would result in huge unemployment in southern (less effecient) economies. They couldn't care less as long as they could sell their goods to them and prosper. However some very predictable chickens coming home to roost.
The only long term solution is the break up of the Euro. It will cause initial pain. Unless this happens it is difficult to see how Spain will ever reduce unemployment below it's current 25%.
The unspoken idea being to tie individual nation states into a bureaucratic superstate.
The idea of a superstate is not new. It goes back to Monnet and Schuman in the fifties and even earlier. The Euro is just the tool that was chosen.
What is happening now is deckchair rearranging on the Titanic while the leaders (including the Europhile Cameron) come up with a better scheme to achieve their political utopia.
You can bet your bottom dollar that all the political rhetoric from the leaders of EU counties will refer to "greater political integration" or words to that effect.
You won't read any of this in the comics that pass as the British press of course.
Actually I blame the French...
Germany wanted a small Euro - Germany, France, Benelux, the UK - ie those countries with similar economies and then allow other European nations to join when they were capable economically of being a member and having their monetary polcy dictated to by the ECB. France though thought that Germany would dominate this small Euro and argued for more nations joining it, hence they turned an economic decision into a political one.
To join the Euro the applicant nations had to go through a series of convergence tests. I forget the exact criteria but debt had to be at a certain level and there had to be sufficient reserves of gold and/or currency etc in the bank. In the case of Italy they didn't have enough gold reserves so they blatantly inflated the value of what they had to meet the criteria.