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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