Europe’s plan to rescue Spanish banks will be an expensive mistake, our City panel warns

 
City A.M. Reporter
PANE

PANEL of City professionals has given a resounding thumbs down to Europe’s bailout of Spanish banks, with fewer than one in ten believing the rescue will work.

Our Voice of The City panel, run with PoliticsHome, showed that close to 84 per cent of respondents think the €100bn bank bailout plan announced last week will not be enough to turn around Spain’s beleaguered banking system.

And less than half of the panel think the EU was right to provide Spain with the loan to prop up its banks.

Almost 47.9 per cent think it made the correct decision by offering the Spanish government up to €100bn to feed into country’s financial sector, slightly lower than the 48.3 per cent who believe it was a mistake.

Even though our panel of City workers was not convinced of the wisdom of such bailouts, they still expect the Eurozone to stump up for more such rescue packages in the coming months and years.

Cyprus is the firm favourite to ask European authorities for a bailout next, with a whopping 52.5 per cent of respondents picking the tiny republic as the likeliest candidate for financial help. Italy came next, with slightly over one in four panellists singling out Mario Monti’s government as next in line for a handout, followed by Portugal, picked by one in six of our panellists.