Spain eventually will require hundreds of billions of euros to bail out its insolvent banking system.
Along the road to insolvency, bank employees sold savings account customers preferred shares in the bank. The preferred shares were misrepresented as being as safe as their depository accounts. These customers were mostly unsophisticated investors who had no business in speculating in bank shares of any kind.
Now that the banks need to be bailed out, the EU is insisting that these people take 70% haircuts on the €5.5bn still held in the preferred shares. With the amounts being thrown around, it mystifies me that they cannot find €3.85bn to make these people whole. At this point, the German-led EU is just being vindictive.