Spain heads for a likely bailout; Obama talks solutions

By Tiffany Hsu

June 8, 2012 10:03 AM PT

Spanish officials are likely to follow those in Greece, Portugal and Ireland in asking for an international bailout when they participate in a conference call with representatives of fellow Eurozone countries Saturday, according to news reports.

But there probably won’t be any specific rescue plan for the country’s besieged banking sector, according to the Guardian. On Thursday, Spain’s credit worthiness was slashed to near-junk status by Fitch, which said the cost of a bailout would be as much as 100 billion euros.

The European Union is working against the clock on the matter -- elections in Greece next week could cause markets to roil if voters there opt to abandon the euro currency. Financier George Soros recently predicted that the region has just three months to deal with its problems.

Across Twitter, hashtags such as #Spailout, #Spanic and #Spexit (based on #Grexit, get it?) were trending.

On Friday, President Obama stressed an “urgent need to act” due to the “threat of renewed recession” in the Eurozone, noting that decisions about the fate of the region “are fundamentally in the hands of Europe’s leaders.”

“The sooner that they act, and the more decisive and concrete their actions, the sooner people and markets will regain some confidence, and the cheaper the costs of cleanup will be down the road,” he said.

Europe is the U.S.’ largest economic trading partner, Obama said.

“If there’s less demand for our products in places like Paris or Madrid, it could mean less business for manufacturers in places like Pittsburgh or Milwaukee,” he said. “The solutions to these problems are hard, but there are solutions. The decisions required are tough, but Europe has the capacity to make them.”

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