The collapse of Spain, the fifth EU economy would disintegrate the euro area. President of the German Central Bank (Bundesbank), Jens Weidmann, recommended Spain to seek the assistance of the European Financial Stability Facility (EFSF), in the context in which Madrid has not requested yet European financial aid, writes AFP.
“If Spain is feeling overwhelmed in terms of funding, it must use the tools created with this purpose,” Weidmann said in an interview with Welt am Sonntag. In an interview with Frankfurter Allgemeine Sonntagszeitung, Volker Kauder, a close friend of Chancellor Angela Merkel said that he is convinced that Spain will seek financial assistance from Europe for its banking system.
Jean-Claude Juncker requested in turn an emergency solution for the Spanish banking system in the context of the eurozone finance ministers meeting on Saturday afternoon to discuss the situation of Spain. “A quick solution should be found,” said Jean-Claude Juncker, Eurogroup chief, explaining that the problems of Spain do not compare to those of Greece, since they cover just the banking system.
According to Felix Zulauf, Swiss hedge fund manager, the euro area has already begun to “break down”, and problems that are getting worse in Greece and Spain will lead to disintegration. “The euro was built wrongly to begin with. I expect the disintegration of the euro area to begin in the second half of this year, which will throw the financial world in chaos. Major events of 2013 will be euro disappearance and China’s weakening because of the housing bubble bursting,” said Felix Zulauf.
European officials told Reuters that Spain will have to ask in the following days European Union for assistance to recapitalize its banking system. Spain would become the fourth country – after Greece, Ireland and Portugal – which require external assistance since the outbreak of crisis in Europe. The teleconference of the finance ministers from the euro area began at 16:00 (local time).
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