I just spoke to an officer and another Austrian ejpañol in Brussels, who has visitilla to me. I have confirmed this date for redemption formal, just after Galegas elections. Terms of rescue:It is remarkable that Merkel has agreed the bailout to be requested after the Basque and Galician regional elections. It is even more remarkable that the short-selling ban from the CNMV (Spanish SEC) ends on October, 23rd, as per the 3-month ban establised on July, 23rd. Mainstream media also hint this date, referencing consulting firms. Goldman Sachs even says Spain is to officially announce it next week, with the following agenda:
- Pensions KO
- Unemployment benefits KO, will be left very reduced
- Government deficit will be reduced to 3% of GDP, regions not meeting to immedately lose self-governance.
September 12: German constitutional court gives its blessing to the ESM. Although we expect some procedural riders to be attached to the decision, this would allow German ratification to be completed and the ESM to be established in relatively short order.There you go guys, with uncle Benny printing like mad across the pond, risk is on again. Bankia is up 100% from lows. Buy, buy, buy!!!
September 13-14: Spain to make formal request for EFSF support at the Eurogroup meeting. With a large (and uncovered) redemption looming at the end of October (and under pressure from other Euro area governments), we expect Spain to move towards seeking support.
Second half of September: Conditionality required by EFSF will have to be accepted by the Spanish authorities, presumably requiring a parliamentary vote. In parallel, approval of other Euro area countries for the provision of EFSF support will need to be obtained: in some countries (notably Germany), this will also require parliamentary approval.
By end-September / early October: Memorandum of Understanding (MoU) codifying conditionality is signed, formalising the availability of EFSF support for Spain. At this point, the necessary conditions established by Mr. Draghi for ECB purchases of sovereign debt will have been met, well ahead of
large Spanish bond redemption.