1. Fascist. You have the Spanish finance minister on TV categorically denying that the government has anything to do with the bailout.
So it begs the question, why is there a government spokesman announcing it and not a bank official?
2. If 40 Billion is all that is required to satisfy outstanding debts then let the banks go through bankruptcy procedures and use the 40 billion to pick up the pieces.
3. If 40 billion is required to recapitalise the banks why not let them fail and recapitalize the depositors and savers?
4. If the 40 billion Euros is a good investment in the Spanish banks then why have private sector investors chosen not to get involved?
5. It gives Spanish banks incentive to cry wolf.
By the European taxpayer bailing out the Spanish banks it gives the green light for banks to say they are in financial trouble in order to get cheap cash.
6. It destroys competition.
If you are one of the smaller banks in Spain think how you would feel with your big competitors getting taxpayer aid and you receiving nothing because you did a good job. At best it makes your life more difficult, at worst it puts you out of business.
7. The banks may say, if the Spanish banks fail then the costs would be far greater than the initial amount but how?
If the Spanish banks have toxic assets which could cause contagion why not use the 40 billion to isolate those toxic assets after the bank has entered bankruptcy proceeding. That way no party is getting special treatment at the taxpayers expense.
8. The banks themselves are saying 40 billion is all that is required to avert contagion.
Okay fine, let the bank fail and use the 40 billion to contain the fallout. At least that way Spanish banks have no financial interest in failing and making bad decisions.
9. A big part of the financial crisis was down to big banks working on short-term gains to get big bonuses.
Bailing out banks in Spain encourages this behaviour because banks are being rewarded with low-cost taxpayer cash for making foolish decisions.
If banks are getting taxpayer cash for making foolish decisions what is going to make them make better decisions in the future if they make much more money by failing?
10. Why is the ECB and European politicians more qualified to invest in Spanish banks than private investors?
Spanish banks are in trouble because private investors are not willing to put up the cash to refinance their own banks.
They have a reason for this, they belive they will never get their money back.
So why on earth does the ECB think it knows better than the private investors. Why does the ECB believe think it is a better qualified investor than people who invest in companies professionally?
Of course they are not.
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