Alan Ahearne: Spain bails out banks as bad as Anglo
NOTHING in Spain's weekend bailout deal has left that country with a better arrangement than Ireland. The full cost of bailing out the Spanish banks will fall on Spanish taxpayers, in the same way that the cost of rescuing the Irish banks fell on taxpayers here.
If the bailout of Spanish banks announced over the weekend proves anything, it is that the choices available to eurozone governments to deal with troubled banks remain limited. Although we don't yet have all the details, it is likely that the Spanish government will bail out banks with loan books every bit as horrible as Anglo's. And senior bondholders and depositors in rotten Spanish banks will almost certainly be repaid in full.
As a member of the euro, Spain must rescue its banks, even the worst of them, using money borrowed by the Spanish government. For all the talk in this country over the past few years about the alleged stupidity of the blanket bank guarantee in 2008, it is clear that Spain doesn't get to avoid the burden of bailing out its banks. Just like we didn't.