The looming debt crisis in Spain finally erupted and the ripple effects can now be felt in each and every corner of the Spanish Economy. The entire London/Wall Street financial and monetary facade have neither been spared from the financial meltdown. As a result, financial analysts are now even wondering if the entire trans-Atlantic financial system is going to survive from an imminent banking collapse.
It was just recently on 25th May 2012, when the Spanish government announced that the cost of bailing out the “Bankia bank” is likely to cost the tax payer a whooping 24 billion Euro’s, and this is only just one institution. The figure becomes unmanageable when hundreds of bank’s across the country are factored in.
There are also other Spanish owned banks that are facing imminent collapse, or are seeking urgent bailout. These institutions are mired with gigantic debts, they are bankrupt, and getting increasingly desperate as the day passes because customers are making unbelievable withdrawals due to lack of confidence.
To make matters worse, Europe does not has enough funds to rescue Spain. Whether the current system is capable of holding down for some few more days, weeks, or months, the moment of truce has arrived, and the Spanish banking industry is in a watertight situation whereby all of its options to hold the current system have completely gone asunder. The rate of banking collapse in Europe, and per say in Spain, is so far exceeding attempts to overtake the very own collapse. This implies that the entire European system, in its current state is simply in a process of hopeless degeneration.
The current Spanish banking collapse situation is more or less comparable to what transpired in Germany in the year 1923, and Spain and Europe as a continent, have found themselves in a catch 22 situation, where the rate at which the industry is collapsing is by far much exceeding the rate of the attempt to overtake the happenings of yesterday.
Due to the prevailing situation, the only solution to the current predicaments is class steagqall. This implies that no bailouts will be issued and the entire financial system should be left to collapse on its own. The Euro currency will have to collapse because it cannot be sustained and the only remaining workable solution is reverting back to the old currencies that existed before, or there shall be no recovery at all.
However, there are some schools of thought who are bringing in the argument that the European Central Bank has enough firepower to pre-empt Spanish banking collapse. But, the bailout has to be negotiated, and the bailout amount depends largely with the independent bank audits including iconic multilateral organizations such as International Monetary Fund (IMF).
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