European commission's spokesman Olivier Bailly has affirmed that the first tranche of €100 billions Spanish 'financial aid' will be delivered by November once the Troika has known the institution real situation and necessities.
"There are clear deadlines for the implementation of the Memorandum of Understanding and it is true that the first deadline is this Friday, when the analysis and stress testing bank by bank will be released," said Bailly. So, "it is clear that the European Commission will make its own analysis in October and the first disbursement will be made in November."
In this line, the European Commission denies recent talks that Spain could receive first tranche of its banking bailout in the next days.
The euro started the week with a weaker tone as risk aversion is the theme of the day, with equities, commodities and fixed income telling the same story on Monday. The fifth consecutive decline in the German Ifo did not help matters while uncertainty over Spain and Greece also undermined riskier assets.
While main attention continues on whether Spain will ask for an official bailout from the EFSF/ESM that would trigger ECB bond-buying in the secondary market, an EU/IMF report into whether Greece's debt is manageable, now looks set to be delayed until after Nov 6.
45-50% discount
Reuters has reported on Monday that Spanish lenders will transfer real estate assets into Spanish new "bad bank" at 45-50% average discount. "The figure is obtained by applying an additional discount of 5 percent to 10 percent over the average writedowns of around 40 percent that the government has already forced banks to take on real estate assets."
However, according to Reuters, the discounts will likely not be steep enough to attract foreign investors to the bad bank. "That could eventually force the state to use more taxpayers' money to take over the toxic assets to later sell them off".
Troika findings - Greece budget shortfall around €20 bln
The Troika mission has announced that Greece faces a budget shortfall of around 20 billion euros compared to previous conditions agreed if the country is to be thrown another 'life-line' of emergency aid. The big miss doubles previous estimates, German magazine Der Spiegel reported Sunday, citing preliminary findings, proving once again the lack of credibility by international authorities to accurately do the numbers in a country fully immersed in an era of 'depression.'
International creditors have refused to provide further support to Greek authorities via the next tranche of financial aid unless the country's budget gap is closed. Previous EUR173 billion aid program signed off in March is admittedly - by EZ leaders - well off track. Greece has been expecting the disbursement of its next fix worth €31 billion since June.
Der Spiegel also reported Euro zone states are planning to beef up the bloc's bailout fund through leveraging its capital, as previously done by the former bailout mechanism, in order to target a maximum capacity of over 2 trillion euros and rescue countries like Spain or Italy, Der Spiegel said on Sunday.
From Reuters: "The weekly news magazine said that the European Stability Mechanism (ESM) would have two instruments like its predecessor, the European Financial Stability Facility (EFSF), that would only allow public money to be used for particularly risky transactions such as buying Spanish bonds, while private investors would provide the rest."
