In Europe, Spain is expected to formally apply for a Troika bailout in November. Despite the Rajoy's government's denials that it has not sought a bailout, Rajoy and his ministers have never specifically said that they refused to consider a bailout. In fact, it is commonly believed that the Rajoy government is negotiating the terms of a bailout right now and is waiting until November before a finalised plan is unveiled. To wit, the latest informtion from government sources says Rajoy is requesting an explicit target spread backstop from the ECB.
According to the ECB's new OMT plan, new bailouts in the euro zone will be managed by the Troika of the EC, ECB and the IMF with the European Stability Mechanism acting as the mechanism through which the bailout occurs. The ESM will buy any Spanish...
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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.