Editor’s note: This article was first published in May 2012, as a news item from 31 May 2012. In June 2012 Spain requested eurozone funds of up to €100 billion to recapitalise its banks, and the Bankia figure given here of €10 billion was soon revised upwards.
The Wall Street Journal reported on its website’s front page that the International Monetary Fund was preparing a contingency plan to rescue Spain in case the country could not raise the funds needed for Bankia, some €10 billion.
According to the same newspaper, the IMF and the European Union want to avoid a Spanish bailout at all costs, its sources said, but the initial plan is being drawn up because the country cannot find the €10 billion needed to rescue Bankia. The total for a possible bailout of Spain would be around €300 billion, and the rescue would take the form of a smaller, short-term loan.
Minutes later, CNBC reported that the IMF had denied holding talks with Spain on a possible financial bailout, and that this discussion would not take place until 4 June at the earliest.
In other words, we gather that a bailout plan is being prepared, even though no bailout plan is being prepared. So let’s give the IMF and Spain a hand with their choice of words: a bailout plan is probably being prepared “just in case”. Let’s call it prevention, even though that bailout plan might not be needed in the first place.
It’s like putting on a helmet to ride a motorbike: you don’t do it because you think you’re going to fall off, but in case you do, it’s good to have the helmet on 🙂
So is a bailout plan being prepared just in case, or isn’t it? Is the Wall Street Journal lying, or is CNBC?
As you can see, we’re even taking it with a sense of humour by now, because this is starting to look like a school playground.
Featured image: Zarateman, CC0 1.0, via Wikimedia Commons.
