Spain Officially insolvent get your money out

http://blogs.telegraph.co.uk/finance/jeremywarner/100024476/spain-is-officially-insolvent-get-your-money-out-while-you-still-can/

Sober reading for sure.

 A very sorry state of affairs . For sure the next two years in Spain will see more and more services cut but as to whether Spain will conduct a raid on peoples accounts , well I dont think so .Harsh conditions and a further collapse in property seem definate  along with a rise in unempolyment and crime . Very sad .

Re the government protection on savings

BBC QUOTE    The new higher limit offers compensation to anyone who has money in a UK authorised bank, building society, credit union or friendly society that goes bust.

Tamara:    I thought, as the BBC quote says, that is to protect savers again banks going broke.  Not the government taxing those savings.

And in the end, Cyprus had to abide by the EU-wide banking agreement that savings up to €100,000 are protected. The "savings-snatch" was on savings over that level. So all we need to do is keep less than €100,000 in our Spanish bank accounts. I think I can manage that!

But when all the wise guys have taken all the money out over 100,000€ to hide it away, and the government still needs a shed load of money, how long before the rules are changed to start robbing the under 100,000€'s accounts.....Lets not forget it was only a short while ago that the UK still had a very low "Safe" protected amount for investors, it's either a very wise or very dumb person who would say "This wont ever happen".

And if their is a long slow run on withdrawing money due to reports like this and someone high up recognizes what is happening, how long before a cap is put on withdrawals.......Well now I am going to start the run on Monday with the 11.30am appointment I have with my Halifax bank in Spain. 

I have just had a letter from Halifax (Lloyd's) in Spain informing me of the impending sale and change over to the new bank this year, on almost every line they make a point of telling me that all the services they have provided in the past will stay the same for all our valued customers..."For the time being".

Me I trust banks.....Spit.

Does anyone know how this ties in with FROB and the ESM?

The Fondo de reestructuración ordenada bancaria (FROB), in English known as Fund for Orderly Bank Restructuring (FOBR), is a banking bailout and reconstruction program initiated by the Spanish government in June 2009.^[1] FROB, translated as the "Fund For Orderly Bank Restructuring", presides over the mergers and acquisitions of Spain's failing savings banks. FROB was funded with €99 billion, which it has used to incentivize the nations large savings banks (or Cajas) to participate in large joint "virtual" mergers in an effort to stave off systematic financial instability?

On June 9, 2012, the Spanish economy minister Luis de Guindos announced that Spain would request a loan of up to 100 billion euro for FROB, which would be used to recapitalise Spanish banks. The money would be provided by the European Financial Stability Facility or the European Stability Mechanism

As of April 2013, the ESM has approved two Financial Assistance Facility Agreement (FAFA) programs, with up till €100bn earmarked for recapitalization of Spanish Banks, and €9bn in disbursements for Cyprus for a combined sovereign state bailout program and financial sector recapitalization program.

Will these agreements from the ESM provide the required stability in the interim to reassure investors and thereby prevent any run on the Spanish Banks?

This message was last edited by ads on 11/05/2013.

Projecting the future has always been an imprecise form of magic, or so Dumbledore reminds us.

But barring that, what are the options? So far the Euro countries have shown that they are prepared to take any sacrifice to protect the Euro in its present form. Will they continue to do so? Are they able to do so?

Seeing that what precisely saving the Euro means is in itself a soft and malleable goal, yes, I venture to predict, the Euro will be saved.

Will Spain be part of it? Looking at the state of the Spanish economy, a devaluation of the currency would be an advantage and would kick-start exports and manufacturing. To be meaningful, this has to happen before it is too late and all manufacturing capacity is lost.

And said devaluation would only be possible if Spain was able to take control of its own currency again.

What would it mean for us expats? A massive write-off of savings and property values? The latter is happening anyway, so maybe a further bump might even be good if it helps turn things around and phase in a recovery. Of course those of us with a mortgage that we are financing from income abroad might even benefit from the mortgage losing its value.

The alternative might be further decline and hardship, unemployment, which would ultimately lead to social unrest, the consequences of which are difficult to fathom.

 I am not a great believer in predictions, and would note that an awful lot of economic predictions on this forum have yet to be fulfilled (and they were spoken with such certainty!!)

BUT Spain will not leave the euro.   It would have to be kicked out and that wont happen.

Personally I think Jeremy Warner has shot himself in the foot.

The original article in the DT attracted more or less 1800 comments. Most energetically rejected his point of view.

Many of those who rejected Warner's point of view were British expats in Spain.

The most interesting part of the whole affair was the reaction in the Spanish press, it was rather as though a bomb had been dropped on the Puerta del Sol in Madrid, - a gross over reaction. Trillo the Spanish Ambassador in London apparently lodged a complaint (I would have done so too). On Monday the DT published another article by Ambrose Evans-Pritchard who, in my book, lacks almost as much credibility as Warner. Ambrose, naturally, contradicted Warner and praised Spain. The Spanish press was still not satisfied.

After 31 years here I still don't understand the Spaniards.