Harley Schlanger: Panic Spreads – Emergency G-7 Finance Ministers Meet on Spanish Debt !

[youtube=https://www.youtube.com/watch?v=wIAdim1ErZg]

• Panic Spreads; G-7 Finance Ministers Hold Emergency Meeting on Spain! 
  by http://larouchepac.com/ 
  By the time the normal workday began on the Western side of the Atlantic on Tuesday, the Group of 7 Finance Ministers (U.K., U.S., Canada, Japan, France, Germany, and Italy), plus European Union officials, had concluded an emergency videoconference call on what to do about the Spanish financial blowout. According to some accounts, continuing massive capital flight out of Spain was top on the agenda.
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  Before the meeting was held, Spain’s Treasury Minister Cristobal Montoro stated on Spanish radio that the price being demanded to buy Spain’s debt (its risk premium) meant that Spain was effectively cut out of the international capital markets, and could not refinance its debt. “Confidence,” therefore, had to be restored by “Europe” (that is, Germany) directly recapitalizing the Spanish banks. And besides, he lied, the sums needed to save Spanish banks aren’t really that much, while technically a bailout of Spain (as a nation) could not work. “The men in black are not going to come to Spain,” he “joked.”
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  Indications are that the imminent bankruptcy of Banco Santander, the lead bank of the British Crown’s Inter-Alpha Group, and the largest bank in Europe, is now at the center of the crisis. Eminent American forecaster Lyndon LaRouche and his EIR magazine identified Emilio Botin’s Santander Bank as the center of the Eurozone bankruptcy in February 2010.
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  On May 31, Spain-based journalist Daniel Estulin, citing high-level sources at the bank, told the Telediario program of Spanish business channel Intereconomia that Santander has 800 billion euros in bad debts, and that Botin has ordered a firesale of foreign assets to plug the hole. According to Estulin’s source, Botin was recently forced to accept 3% of face value in order to unload toxic assets on NY’s Fortress hedge fund.
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  British news service Reuters put out a wire on June 4 attempting to calm concerns that Santander is as bankrupt as the rest of Spain’s banks. Santander’s stock has lost 40% of its value in the last year, for no reason, Reuters argued. No capital flight has been reported from its Mexican or Brazilian subsidaries; and the run on its UK unit last month stopped when UK authorities slapped on exchange controls.
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  Botin himself stated authoritatively on June 4 that “there is no financial crisis in Spain,” adding a call for Europe to bail out Spain’s other banks, asserting that a mere 40 billion euros would stop the crisis. Notably, he did this during a visit to Brazil, the leading source of Santander’s profits globally, where he mightily denied the reports that Santander was trying to sell 30-40% of its Brazilian ownings, in order to raise cash.
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  The “men in black” may be digging graves in London first. The Daily Telegraph, which began the day citing the estimates of economists from Royal Bank of Scotland (RBS) that Spain will need between 370 and 450 billion euros once any bank rescue begins, reported this afternoon that the top 5 British banks are “sitting on a 40 billion pound ($61.5 billion) black hole of undeclared losses,” according to shareholder advisory group PIRC. And of those five, it is the Inter-Alpha Group’s RBS which is in the worst condition.
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  So, were any decisions announced from the emergency G-7 meeting? EU spokesman Altafaj called it a “regular exchange of views;” any idea that they were “extraordinary or alarm or alert meetings because of the crisis” should be dismissed. Japanese Finance Minister Jun Azumi told reporters the G-7 members were “concerned about the unstable situation in the current global economy, and we need to share these concerns.” An unidentified U.S. Treasury official said merely that they discussed “progress towards financial and fiscal union in Europe,” and Treasury believes “measures to strengthen the European banking system will be of special importance in this period.”
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  The next scheduled official policy confab is the June 18-19 G-20 meeting in Los Cabos, Mexico… which convenes the day after the Greek elections.

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