Catalonia Demands a Bailout as Sovereign Bailout Looms Over Spain

Catalonia is asking for 5 billion euros and says it will reject any political conditions. The northern province, which represents one fifth of Spain's economy, is looking to receive funds from the proposed but yet to be realized eighteen billion euro liquidity fund announced by the central government back in July.

Data released today showed that Spain's economy as a whole contracted 0.4 percent in the last three months. Spain and its constituent provinces have cuts spending, but it is unlikely to be enough to avoid some intervention from international bodies. Over a Bloomberg Andrew Davis and Angeline Benoit explain:

Rajoy has introduced the most aggressive austerity measures in Spain in more than 30 years, though without the regions curtailing their shortfalls, the government is at risk of missing its 2012 deficit goal of 6.3 percent of GDP. Earlier this month, Rajoy imposed debt ceilings on the regions, with Catalonia limited to total borrowing of 22.8 percent of output this year, compared with 21 percent in the first quarter.

Catalonia indicated that it would need bailout funds back in July, when it was already clear that the province was unable to pay for social services. As pointed out above, Spain may very well miss its deficit reduction goal, and many think that Spain will be the next country in line for a sovereign bailout. The Spanish government has said that it will wait for the European Central Bank to outline its plans before any formal request is made. However, Prime Minister Rajoy has said he is open to all options. A few days ago Reuters reported on talks between the Spanish government and European officials on conditions for a possible bailout. Rajoy's office refused to comment.

The mechanism for provincial bailouts the Spanish government proposed back in July would use bank loans and lottery funds to help indebted provinces. Although Catalonia has made the request many were expecting the liquidity mechanism is still not active.

The recent request for funds from Catalonia comes as representatives from the troika (European Commission, International Monetary Fund, and the European Central Bank) visit Lisbon to oversee Portugal's reforms and the President of the European Council, Herman Van Rompuy, visits Spain. For today at least all eyes are on the Iberian Peninsula. Greece can enjoy a rare day out of the spotlight. 

Comments

[John]

Catalonia to German tax payers "because fuck you that is why". Can someone please tell the Germans they are forgiven for World War II and let them off their leash. Let the Germans be Germans again. Europe deserves them.

[Brett L]

Uh. As long as everyone knows that the US isn't coming back from the outset. I imagine that French surliness and Italian corruption can rot the mighty German empire from within faster than having a megalomaniaical mysticist running it.

/No Godwin

[Jersey Patriot]

It's a pretty cool system. The French and German governments bail out their banks while the blame gets shoved on the PIIGS.

[BakedPenguin]

Black Flag explain Catalonia's position.

[LTC(ret) John]

Or, how about...

Stop wasting my time
You know what I want
You know what I need
Or maybe you don't
Do I have to come right
Flat out and tell you everything?
Gimme some money
Gimme sone money
I'm nobody's fool
I'm nobody's clown
I'm treating you cool
I'm putting you down
But baby I don't intend to leave empty handed
Gimme some money
Gimme some money
Don't get me wrong
Try getting me right
Your face is ok but your purse is too tight
I'm looking for pound notes
Loose change
Bad checks, anything
Gimme some money
Gimme some money

[Pro Libertate]

The spending goes to 11.

[Fist of Etiquette]

Catalonia is asking for 5 billion euros and says it will reject any political conditions.

Oh, so many times as a teen did I tell my parents, "Give me money and shut the fuck up about it."

[LTC(ret) John]

And did they kick you with the Foot of Manners?

[Episiarch]

I'm not surprised Catalonia wants to be bailed out first. They're the economic powerhouse of Spain and have long been sick of propping up the rest of the country. This province produces one fifth the economic output.

[Warty]

Everyone in Spain hates everyone else in Spain, right? Like, even more so than every other Euro shithole.

[Episiarch]

The Catalans don't consider themselves Spanish. They have their own language, they used to be a separate kingdom (Kingdom of Aragon), and they tried for independence in the Spanish Civil War, and when they lost, Franco really put the screws to them. He banned them from Speaking Catalan or teaching it in school (Antoni Gaudi was accosted on the street by Franco's police for speaking in Catalan), and it just made them hunker down and hold on to their separate identity even more.

So yes, classically tribal Europe.

[Tman]

I didn't realize Epi was our resident Catalonia expert.

Nor would I have guessed that either.

Impressive dude.

[Warty]

He kept a Catalan chick in his basement for a while, I think. You pick up stuff from your gimps.

[LTC(ret) John]

Did he dress like El Cid too?

[Warty]

No way. That would be racially insensitive. Epi seldom kills Moors.

[LTC(ret) John]

"seldom" - for lack of opportunity or out of cultural sensitivity?

[Tman]

Tell me about it. I'm almost an expert in Inuit history and customs.

What can I say? I love blubber.

[LTC(ret) John]

Go up for seal clubbing season?

[Tman]

Never miss it. Tough to beat some fresh baby seal loin. Tastes like veal.

[Ice Nine]

John?

[JW]

He even has the Catalonian lisp. Well, he says that's what it is.

[Mr Whipple]

Are you talking about the CNT "anarchists"?

[Brett L]

Kind of like how Arkansas/Lousiana/Mississippi/Alabama/Tennessee are all proud they aren't those other cousin fuckers?

[Warty]

Americans love to play at hating each other, but we cannot even comprehend how much people in the rest of the world hate each other.

[Brett L]

Our grudges are, at worst, 300 years old. Theirs go back to some Italian or German guy raping their land and stealing their women starting 2500-1200 years ago. Yeah. Give us time.

[Pro Libertate]

It's like our racism. We're total amateurs compared to, well, the planet.

[John]

More proof, there is no peak retard.

GRAND ISLAND, Neb. (CBS St. Louis) ? A Nebraska school district asked a deaf preschooler to change his sign language name because they believe the hand motion he used looked like he was shooting a gun.

The family of 3-year-old Hunter Spanjer said that their deaf son's sign gesture violates the Grand Island Public Schools weapons policy.

"He's deaf, and his name sign, they say, is a violation of their weapons policy," Brian Spanjer

http://stlouis.cbslocal.com/20.....-like-gun/

[Brett L]

Surely no jury in the world would convict his parents of tarring and feathering these asshats before riding them out of town on a rail.

[wareagle]

who would have thought that a name like Hunter might involve a hand sign that has anything at all to do with shooting.

his name sign, they say, is a violation of their weapons policy
you cannot make up shit like that.

[Ice Nine]

He should, for them, change his hand sign to an extended middle finger.

[Brett L]

Nice.

[VG Zaytsev]

Or Mohamed.

The ASL gesture for that names is dragging two fingers across your throat.

[JW]

What's your name when you brusquely and diagonally bracket your groin area with both hands?

[ant1sthenes]

Dick Armey?

[Bardas Phocas]

The global plutocrats are meeting Jackson Hole this week to orgy and decide all our fates.
The Bernanke will give a speech on Friday in Jackson Hole.
We are doomed.
So doomed.
http://www.youtube.com/watch?v=5U319VzSqEU

[Warty]

Orwell from Homage to Catalonia:

The human louse somewhat resembles a tiny lobster, and he lives chiefly in your trousers. Short of burning all your clothes there is no known way of getting rid of him. Down the seams of your trousers he lays his glittering white eggs, like tiny grains of rice, which hatch out and breed families of thier own at horrible speed. I think pacifists might find it helpful to illustrate thier pamphlets with enlarged photographs of lice. Glory of war indeed! In war all solderies are lousy, at the least when it is warm enough. The men that fought at Verdun, at Waterloo, at Flodden, at Senlac, at Thermopylae - every one of them had lice crawling over his testicles.

[Warty]

More:

I believe that on such an issue as this no one is or can be completely truthful. It is difficult to be certain about anything except what you have seen with your own eyes, and consciously or unconsciously everyone writes as a partisan.

Perhaps when the next Great War comes we may see that sight unprecedented in all history, a jingo with a bullet-hole in him.

[Episiarch]

Orwell got a rude awakening in Barcelona.

[Warty]

Some men have to learn the hard way.

[LTC(ret) John]

No Pasaran!

[BakedPenguin]

The Spanish Stalinist Reds were jackasses. Get victory first, then you purge.

[Drake]

I want 5 billion euros no strings attached. Who wouldn't?

[LTC(ret) John]

I'll settle for 10,000 Euro, a few bottles of wine and some tasty tapas.

[Paul.]

Catalonia is asking for 5 billion euros and says it will reject any political conditions

I'm beginning to understand why Europe started so many wars in the early 20th Century.

[LTC(ret) John]

Well, a number of previous Spanish monarchs would have sent a few tercios of foul tempered but very effective infantry to deal such demands.

[Auric Demonocles]

I think the Spanish government should send some people to ask why they want the money. If they want that much money they should at least respond to inquisitive officials.

[LTC(ret) John]

You know who else had inquisitive officials?

[Auric Demonocles]

To go with an unexpected route, I'll go with the Spanish Ferdinand and Isabella.

[Paul.]

The National Enquirer?

[Paul.]

OH, and so much for Catalonian independence.

"Give us money, save us!" doesn't scream "Revolution" to me.

[LTC(ret) John]

The Bloc Quebecois of Spain?

[Episiarch]

That ship sailed once they became an Autonomous Community; all the fervor for independence basically died out. Franco's rule kept that flame alive, but after his death, when everything got so much better, people stopped wanting independence and just wanted to enjoy not living in a dictatorship and having prosperity.

If the Catalans didn't have the Spanish to bitch about, what would they do?

Same for the Basque, except the Catalans never produced a crime syndicate masquerading as an independence movement, and stopped even minimal support for ETA after the Barcelona bombings.

[Paul.]

Yet another European gr?ve g?n?rale, or pro-government pep ralley known as the Occupy Movement.

Our only protest is that there isn't enough government.

[ChrisO]

I'm pretty sure the "demand" for a lack of conditions by the Catalonians is backed by a threat to declare independence, if that Guardian article linked to by Matthew is accurate. The current nationalist government is threatening to call elections if they don't get their way. A pretty weak threat, to be sure.

[Paul.]

So... let me understand this.

My neighbor shouts across the fence at me, demanding I give him $5000 to help make his car payment, and he will not accept any conditions on the bailout.

As he turns and goes back towards his house, he looks over his shoulder and yells, "Oh, and if I don't get the bailout, I'll withdraw from the neighborhood!"

This concerns me how?

[JD the elder]

Amen to that. When will people understand that if you set up an economically untenable system, when it falls apart, it is your fault, not the fault of the big meanies who won't give you money afterwards? (Answer: when it becomes profitable to understand that, I guess.)

[Episiarch]

You are missing the relationship here. Catalonia wants money from the Spanish national government, not from Germany or other solvent countries. My guess is they don't care where the national government gets it from; they are the most important economic region in Spain and have some clout and are probably trying to use that clout to get first access to the trough (that they hope is coming).

So it's more like your neighbor asking you for money, and then his kid yells to him "I get first dibs on any money you get to pay for my X-Box, and that's final!"

[Paul.]

You are missing the relationship here. Catalonia wants money from the Spanish national government, not from Germany or other solvent countries.

I'm not missing the relationship. Catalonia is asking their neighbors (aka the Spanish Taxpayers not living in Catalonia) to pony up.

If they're the most important economic region in Spain and they want a $5 billion bailout, then their economic importance is defined by the scope of their incompetence.

If you're correct and they are of outsized economic importance, it sounds like they're making a "too big to fail" argument here.

IF that's the case, my analogy should be:

My very rich neighbor in a house much bigger than mine demands $5000 so I can continue to clean his pool.

Yeah, I like that.

Oh, and furthermore, Spain doesn't have any money, so if Spain gives them the money, they are by extension getting it from somewhere, presumably... Germany?

[Scarcity]

I'm going to Paris and Barcelona in a month. I hope neither one is on fire when I get there.

[Tman]

I wouldn't worry about Paris. Even fire goes on strike over there.

[LTC(ret) John]

Victory is yours. What will you do with your new won thread?

[Raven Nation]

That's not what they were saying back in '68.

[R C Dean]

the proposed but yet to be realized eighteen billion euro liquidity fund announced by the central government back in July.

If I follow, the Catalans are demanding no strings attached money from the Spanish government.

Which of course, has no such funds, and cannot even print it up because the currency is the Euro.

The actual source of the funds is a mystery, but is presumably one of the Euro bailout funds. Which have either not been actually ratified, or not actually funded (a risible joke, since they are supposed to be partially funded by the very countries needing bailouts), or cannot give no strings attached money to the central government in any event.

[Raven Nation]

Apparently Spain requested 100 billion Euros in June from the Eurozone bailout fund to support its banks.

[Auric Demonocles]

I am asking for 5 billion alt-texts and will reject any political conditions.

[BarryD]

"Spain may very well miss its deficit reduction goal"

ROTFLMAO