Worsening Spanish Banking Situation Makes Bailout More Likely


Although Spanish bond yields improved slightly today, tensions remain high over Spain’s banking crisis after Spanish Prime Minister Mariano Rajoy said over the weekend that this “is not the eve of the Apocalypse” for his country’s economy and Spanish and EU officials probably began informal discussions of some sort of bailout plan. A debt auction on Thursday will be a key test for the Spanish economy and could force Madrid to drop its official opposition to an EU/IMF bailout.


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