Today, Spanish newspapers confirmed that a number of regional governments on the verge of bankruptcy must follow Spanish banks in requesting aid from the central government. However, with Spanish central government itself facing record euro era highs in 10-year bond yields and spreads to German yields, it is clear that the sovereign cannot support the regions. The Spanish crisis is therefore near a breaking point, with the government pleading the ECB to intervene.
All of these events have come over the weekend from various sources inside of Spain. Let me run down the threads and put them together for a more comprehensive view.
First, at the end of last week, it became clear that Spanish regional governments, shut out of bond markets, would need to tap the promised regional aid facili...
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Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator in print and on television for the past decade. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.