SPANISH BAILOUT PROGRAM IS THE BIG THREAT FOR THE EUROPEAN UNION ESTABLISHMENT | Euro Loosing its worth

SPANISH BAILOUT PROGRAM IS THE BIG THREAT FOR THE EUROPEAN UNION ESTABLISHMENT

Spain is the biggest player in the formation of the European Union. It plays a vital rule for the purpose in the past. Unfortunately Spain is under the influence of continuous economic recession. Especially during the last two years Spain is facing very difficult financial situation for the rehabilitation of its sinking economy. Spain is the 13thlargest economy in the world and a major contributor in a European Union establishment that is why the European Union is considering very seriously the problem of Spain and trying to solve these problems. In this regard European Union has passed a bailout program for the rehabilitation of banking sector in Spain to support the sinking economy of a big country in Europe. However there are some potential threats related to this bailout program. In this article some potential threats are given hereunder to understand the real situation facing the European Union regards this bailout program:

•           Effect of bailout programs in three other European countries

In past three other bailout schemes were executed by the European Union and International Monitoring Fund (IMF) for the three different countries of Europe i.e. Ireland, Greece and Portugal. The terms and conditions for these countries were very tough containing the labor reforms and other such difficult decisions for the government of these countries. But now European Union with IMF is considering some soft terms for Spanish economy because this economy is among the biggest economies of the European region. This difference in dealing the bailout program for different countries is arousing uneasiness among the members of European Union especially in the minds of these three countries. They are thinking that they are second class members of the European Union and the Spanish are the other way round that is why they are treated as the special case.

•           The potential adverse effects of elections in Greece

In the next week people Greece is going to elect their new government. On 17th of June 2012 a general election is going to be held in Greece. The important thing in these Greece elections is that the opposition party is very strict against the adopting different standers for different members of the European Union. They are just demanding the resignation of Greece from the membership of the European Union if the Greece is treated as second class members of the European Union. Therefore it is important to consider the situation when the opposing party comes into power and demanded to leave the European Union that what will be the fate of the European Union and what will be the consequences of this potential happening. On the other way there is a soft corner in the strategy of the ruling party toward the European Union. They are willing to make negotiation with the European Union authorities about their rights in the Union. In short the fate of the European Union is depending on the event on Grecian election which is going to be held in next week. 

•           Viewpoint of Germany

Germany is the major player in providing the fund in bailout programs. They have invested a huge amount in last three bailout programs and now the European Union once again considering the major portion must be provided by the German investors. On the other hand a perception in the German investor is that it is not a wise practice to spend more and bad spenders. That is why they are reluctant for extending the bailout fund for Spain on soft terms. In short a difficult situation is waiting for the authorities of European Union especially for the finance minister to handle the issues of the Spanish Bailout Program.   

•           Possible after effects of Spanish bailout program on Euro

Due above said and some other reasons majority of the expert is advising to stay away from making long term investment in Euro. They are for sighting the weak position of Euro in the future mainly due to the above discussed events and problems which European Union has to face. Moreover the continuing recession is playing a vital in making these problems more intensive. Taking in view the economists are suggesting the inventors to invest in commodities rather than the Euro. For this purpose some good companies are offering their service like bbinary. They claim trade with [bbinary] for quick profits and fast, easy withdrawals. Receive a 100% match bonus on your first deposit. Under such condition dealing with such companies are advisable.