Photo: anoldent on flickr
Ireland and Portugal are both going to need bailouts, but Spain will be spared for now, according to Societe Generale.Ireland’s story is now well known, and while it is trying to construe its bailout as nothing more than banking sector aid, the reality is the country is getting help from the European Financial Stability Facility. That’s a bailout, anyway you slice it.
Portugal is now scaring markets, with the country’s foreign minister making a comment that puts its position in the eurozone in doubt and its finance minister saying financial market contagion from Ireland and Greece is going to force Portugal into accepting aid.
But Societe Generale says the Spanish threat is not yet substantial.
There reasons include that Spain has a stronger banking sector, better real estate market, and, if that real estate market was to struggle, the Spanish banking sector would be able to handle it.
So while Ireland has had to bailout out its banks with significant funds, Spain has not and, according to SocGen, likely will not have to. Therefore it is unlikely the country will be needing support from the EFSF.