FXstreet.com (Barcelona) - According to Reuters the Eurozone is considering the possibility of providing an insurance for investors who purchase Spanish government bonds. The estimated cost of such a program would be 50 billion euros per year. If implemented, 20 to 30% of each new Spanish bond would be guaranteed by the ESM.
By adopting this scheme the Eurozone would help Spain satisfy its funding needs, without overburdening EU taxpayers. Contagion to Italy would also be prevented.
Jamie Coleman from ForexLive comments: “The market seems to be warming to the idea of the potential for an EU bond insurance program for Spain. The fact that the ideas was proposed by the Finns, among the most hard-nosed of the European creditor nations, suggests it would be acceptable to the other Northern European members of the euro zone.”
By adopting this scheme the Eurozone would help Spain satisfy its funding needs, without overburdening EU taxpayers. Contagion to Italy would also be prevented.
Jamie Coleman from ForexLive comments: “The market seems to be warming to the idea of the potential for an EU bond insurance program for Spain. The fact that the ideas was proposed by the Finns, among the most hard-nosed of the European creditor nations, suggests it would be acceptable to the other Northern European members of the euro zone.”
