What exactly will be the mechanism to effect a Spanish sovereign bailout?

A lot of pundits have come to the same conclusion that I have come to regarding problems in Spain, namely that the market is no longer willing to believe the country is solvent without European-wide intervention. The consensus, therefore, seems to be that Spain will be bailed out. I ask: by whom?

I think this question is important. Greece, Portugal, Ireland received sovereign bailouts which were easily funded by the Troika via EU and IMF funds. The goal here was to allow the countries time to make fiscal corrections which would allow market funding at a later date. As such, rollover of maturing issues would be funded via cheap loans from the Troika while fiscal deficits were reduced enough to enjoy market funding access. That was the rationale.

Spain is a different matter altogether...


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