Germany and Spain are both digging in their heels. Courtesy of el Economista and Google Translate, please consider Germany pressed for Spain to resort to bailout fund.
German Finance Minister, Wolfgang Schäuble, have pressured the Spanish owner of Economy, Luis de Guindos, for Spain to resort to European rescue fund, fearing that fails to stay afloat on its own.
According to reports advanced by the weekly Der Spiegel, Chancellor Angela Merkel and her minister chose this route earlier this week.
Schäuble would have raised the possibility to de Guindos at their last meeting held in Berlin on Wednesday, which the Spanish minister refused, arguing that Spain will be able to fend for themselves.
Der Spiegel says, without specifying sources, Merkel and Schäuble pressure on Spain to resort to European Financial Stability Fund (EFSF), to the growing threat of contagion to other countries of southern Europe, if possible abandonment of Greece in the euro area.
According to that publication, the German government estimates that Spanish banks will require a capital injection of between 50,000 and 90,000 million euros.
Berlin flatly rejected the possibility of direct aid to rescue fund banks, bypassing governments, in this case Spanish, contrary to the views expressed in that direction from the International Monetary Fund (IMF) and the European Commission (CE).
Both Merkel and Schäuble repeatedly this week expressed confidence in the measures taken by the government of Mariano Rajoy.
Who the hell do Merkel and Schäuble think they are fooling? How can one express confidence in Spain while simultaneously pressuring Spain to accept a bailout?
For more on Orwellian doublespeak, please see Edge of a Precipice; Doublethink Extraordinaire; Spain in Discussions With US Regarding Bank Aid; Gold Soars; Geithner to the Rescue?
Mike “Mish” Shedlock
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