Spanish banks: another meeting.

The finance ministers met yesterday and agreed on the following:

1. The conditions of Spanish bank bailouts;
a) estimated cost E100B;
b) banks will accept rules and supervision;
c) this agreement has to be approved by the legislatures of Germany, Holland and Finland;
d) Spanish bank executives will have salaries capped and no bonuses;

2. They will meet again on July 20 and hope to have legislative approvals by then;

3. The bailout will be done in two steps;

4. Spain has till 2014 to bring its deficit down to 3%.

The mechanism of funding the ESM is left for later meetings.

The yoke of deficit spending remains. Even at 3% annual deficit, the Euro will lose value.