Post by account_disabled on Feb 19, 2024 20:33:17 GMT -8
The debt purchase program issued by regions and municipalities planned by Frankfurt leaves out territories whose credit rating has been downgraded to “junk bond” Santander, BBVA and Bankia will take their strategic assets outside of an independent Catalonia Panic in the corralito: banks stop massive transfers of funds to branches outside Catalonia The ECB puts pressure on six banks to leave Catalonia Mario Draghi. Mario Draghi, president of the ECB. Catalonia remains in the hands, exclusively, of the central government. A forward flight by the independence groups will lead to the immediate bankruptcy of the Generalitat. Rajoy is willing to use all the resources at his disposal before applying article 155 of the Constitution and cutting off liquidity to the region. Reason: the ECB will not be able to rescue you either. The president of the European Central Bank, Mario Draghi, announced a few weeks ago that the ECB is prepared to increase its stimulus plan , currently 60 billion per month.
He plans that the expansion of the debt purchase program will involve the acquisition of bonds issued by cities and regions in the euro zone. But the agency imposes as a condition for acquiring sovereign bonds or public company bonds that the issuer has an investment grade rating . That is, with a minimum rating of BBB- for Standard & Poor's and Fitch, and Baa3 for Moody's. Catalonia will be left out of debt purchases This requirement excludes in Spain Middle East Mobile Number List the purchases of the debt of Catalonia, Castilla la Mancha, Andalusia, Murcia and the Valencian Community , currently classified as “junk bonds” by risk rating agencies. But no Spanish community runs the risk of being left out of the central government's liquidity support measures , which will allow them to benefit from these bond purchases. All, except Catalonia, in the event that the Generalitat decides to continue forward with the “disconnection” from Spain.
There are some 465,000 million euros of regional and local debt in circulation on the market. In the case of Spain, the autonomous communities have bonds for about 53.5 billion , according to data as of June from the Bank of Spain. Government's reason for not cutting liquidity The ECB will not be able, therefore, to come to the rescue of Catalonia if the Government cuts off its liquidity. This is the main reason, according to sources from the Executive's economic leadership consulted by El Confidencial Digital , why Rajoy recently ordered Montoro to abandon the plan to cut funding to the Generalitat as a pressure mechanism. The suspension of new remittances from the Autonomous Liquidity Fund (FLA) had been planned. If the flow of money that reaches Catalonia from the Liquidity Fund does not follow its ordinary rhythm , the situation of financial suffocation in the region would be immediate: it would place it on the brink of bankruptcy, without the ECB being able to carry out any emergency maneuver to save it. . In a few weeks, the Generalitat would stop paying some suppliers and would even have problems paying the payroll of its officials . In this phase, the most obvious victims would be Catalan businessmen, self-employed workers and workers.