And then there were four . . .

A bailout of Spain's banks is unlikely to draw a line under the country's insolvency. Without growth, the only result will be a need for a sovereign bailout too, writes Cliff Taylor.

9th June, 2012
German chancellor Angela Merkel and Spanish prime minister Mariano Rajoy: Germany is likely to want any banking bailout to be underwritten by the Spanish government. Photo: Bloomberg

On the way

Spain is heading for a bailout with talks now under way. This will be presented as a bailout of its banks, rather than the exchequer.

From claiming a week ago that it could stand on its own financially, Spain has now admitted that it needs assitance. Just as happened with Ireland, initial denial turned to an acceptance of reality. The Spanish government hopes that the aid package can be presented as merely...

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