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Italian Industry Minister Corrado Passera tried hard to conceal that his nation may be next. It's also burdened with financing 22% of Spain's bailout. Talk about the blind leading others visually impaired.
China's Vice Finance Minister Zhu Ghuangyao criticized the Spanish deal. He called it a short-term fix. He said more decisive action is needed to safeguard longer term stability. It's sorely lacking in all bailout deals.
Moreover, by agreeing to terms, Spain subordinated its bondholders. They include its own banks. Madrid incurs a greater debt burden. It sacrificed sovereignty for ready cash. Spaniards face greater austerity. Cyprus just asked for urgent aid. Its banks are deeply troubled.
Its Finance Minister Vassos Shiarly described an "exceptionally urgent" situation requiring end of month resolution. Contagion is spreading. Five troubled economies assure greater woes for themselves and others to come. They can't all bail out each other. A bad ending looks assured.
European Financial Stability Facility (EFSF) funds are earmarked for Spain's banks. The European Stability Mechanism (ESM) is also supposed to help. Germany's parliament hasn't ratified it, so it's yet to be set up.
Finland wants collateral for EFSF funds. Spaniards demand jobs and attention paid to other popular needs. They've gotten neither so far and won't. They'll suffer greater hardships ahead.
Spain and other troubled Eurozone countries haven't addressed fundamental economic deficiencies. Kicking the can down the road only buys time. Band-aid solutions don't work.
Coping with a debt problem with more assures far greater future trouble. By 2014, Spain's obligated for about 500 billion euros in claims. They include deficits, debt rollovers, and bank recapitalizations. Where the money comes from isn't known. Nor are solutions clear for other troubled Eurozone economies.
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