: Easy, Miss. I've got you. Lois Lane
: You -- you've got me? Who's got you?
-- Superman, 1978
NEW YORK (TheStreet) -- This is the first of my weekly columns at TheStreet.com on Euro Crisis so I'll try to keep my cynical inner child on short leash. If you doubt my sincerity, please re-read the title.
Facts on the Spanish bank bailout have been quickly and widely reported. In summary, points worth highlighting include: Spanish government may get up to 100 billion euros from somewhere, sometime over the next month or two, likely either EFSF if finalized before end of June or ESM, which will succeed EFSF in July. The money will be a loan to the Spanish government, i.e., a liability of the Spanish government that may be pari passu (equal in seniority to other sovereign bonds), if funded by the European Financial Stability Facility, or senior to other debt if funded by the European Stability Mechanism. The loan rate will be much lower than the equivalent Spanish sovereign yields. The loan will be used by Spanish government to recapitalize banks, somehow. Unlike the treatment of Greece, Ireland and Portugal, this rescue package does not carry any fiscal condition on the Spanish government. However, it is implicitly dependent on the austerity measures and deficit targets nominally endorsed by the Rajoy government, which won election last December. It does, however, carry specific conditions on banks ultimately receiving the funds.
Perhaps more importantly, Der Spiegel reported Saturday (via CNBC) that "European Union Commission President Jose Manuel Barroso, European Council President Herman Van Rompuy, Eurogroup head Jean-Claude Juncker and European Central Bank President Mario Draghi are working on plans for a 'genuine fiscal union' in which individual member states would no longer be able to independently take on new borrowing." Notably, no Germans are invited to the meeting so its credibility is zero but still . . .