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Spain too big for EU rescue fund as China recoils - (www.telegraph.co.uk) As Spain edges closer to a full sovereign rescue, economists have begun
to doubt whether the EU bail-out machinery can raise such large sums funds at
viable cost on global capital markets. While the International Monetary Fund
thinks Spanish banks require €40bn or so in fresh capital, any loan package may
have to be much larger to restore shattered confidence in the country. Megan
Greene from Roubini Global Economics says Spain's banks will need up to €250bn,
a claim that no longer looks extreme. New troubles are emerging daily. The Bank
of Spain said on Thursday that Catalunya Caixa and Novagalicia will need a
total of €9bn in new state funds. JP Morgan is expecting the final package for
Spain to rise above €350bn, while RBS says the rescue will "morph"
into a full-blown rescue of €370bn to €450bn over time -- by far the largest in
world history.
Spain downgraded again, at risk of junk status - (money.cnn.com) Spain's sovereign debt rating was slashed three steps Thursday by credit
rating agency Fitch, which warned that the nation is at risk of being
downgraded into junk bond status. The nation's debt rating was cut from
"A" all the way to "BBB," the lowest rating that is
considered investment grade. And the new rating was given a negative outlook,
meaning it at risk for further downgrades. Fitch pointed to the estimated cost
of a Spanish bank bailout, which it said is likely to cost between €60 billion
to €100 billion, as well as a prolonged recession that Fitch now expects to run
throughout 2013. "Spain's high level of foreign indebtedness has rendered
it especially vulnerable to contagion from the ongoing crisis in Greece,"
the agency said in the note. "The much reduced financing flexibility of
the Spanish government is constraining its ability to intervene decisively in
the restructuring of the banking sector and has increased the likelihood of
external financial support."
Portugal
props up banks with €6.6bn - (www.telegraph.co.uk)
Portugal is to inject up to €6.65bn (£5.4bn) into three of its biggest
banks to meet an EU deadline for higher capital ratios by the end of this
month. Private lenders BCP and BPI will receive €3.5bn and €1.5bn in return for
convertible bonds. The funding will come from a recapitalsation credit under
the country's €78bn bail-out from the EU-IMF "Troika". The
state-owned Caixa Geral de Depositos will receive €1.65bn under different
rules. The move was expected, unlike the dramatic rescue of Bankia in Spain. Troika
officials announced on Monday that Portugal's reform programme "remains on
tracking amidst continuing challenges", clearing the way for the next
€4.1bn tranche of rescue loans.
Young
adults skip health care as debts rise - (money.cnn.com)
Millions of young adults are forgoing necessary care and treatment
because of rising health care costs, a
report said Friday. In fact, 41% of young adults between age 19 and 29 failed
to get medical care in a recent 12-month period because of cost, according to a
Commonwealth Fund survey. Among uninsured adults, the number rose to 60%. They
are not filling prescriptions, skipping recommended tests or treatments,
avoiding doctor visits and failing to get specialist care they need. "This
reflects the high cost of medical care right now and health pl ans that may not
cover people very well," said Dr. Sara Collins, vice president for affordable
health insurance at the Commonwealth Fund and chief author of the survey.
Spanish
bailout rumors abound - (money.cnn.com)
Spain needs help to resolve a festering banking crisis and it seems
increasingly likely that the nation will seek a financial rescue soon. European
Union officials are eager to resolve the issue before a pivotal election in
Greece, which could present another major turning point in the long-running
euro crisis. Spain could make a request for financial aid this weekend,
according to a report by Reuters, which cited EU and German sources. The wire
service said Friday that finance officials from all 17 euro area nations will
hold a conference call Saturday to discuss the rescue package. But a spokesman
for Jean-Claude Juncker, who heads the Eurogroup of finance ministers, told CNNMoney
Spain has not yet requested financial assistance and that no conference call
has been scheduled.
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