This week the Spanish Prime Minister and financial advisors met with the European Central Bank (ECB) to discuss their 2013 deficit predictions and the possibility of a bail out plan. ECB analysts criticized the Spanish predictions saying that ". . . predictions are too optimisitc and assume the economy will continue to grow." Despite this fact, the ECB supported the Spanish decision of unlimited and Sovereign bond programs. Already, countries like the US, UK, and Japan have purchased bonds of Spanish debt, with the ESM evaluating a purchasing plan.
All of this is in hope of lowering Spain's 2013 deficit and give the country some economic growth and avoid a bail out. Spain has also instititued a social program slash which lead to protests in Madrid and Barcelona this week. The official statement echoed hints of over spending and reliance upon government drowning the country financially.
Despite all of this, Spanish bonds have continued to fall in interest rate, an optimistic sign for the country.
Even though Spain is still teetering on a dire situation, I think the country show shy away from the bail out idea. Spanish public opinion, provided by my brother living in Seville, does not support the EU's advocacy of austerity and is resistant to a German style of economy. They view this as German Imperialism. The unlimited bond program is Spain's route to financial security. When the Spanish nation takes accountability for its debt and bonds together it will establish a stronger economic net within the country. This also shows the EU that Spain is willing to try various strategies and receive more favorable rates.
http://www.bloomberg.com/news/2012-10-04/eu-said-to-doubt-viability-of-spain-s-2013-deficit-cut-target.html
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