Eurozone: lots of bad news

Spain

2010-06-01 (MarketWatch) -- The stream of negative news from Spain's savings bank sector continued on Tuesday, with a report that the second largest player, Caja Madrid, will tap the government for 3 billion euros ($3.6 billion) of rescue funds.

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The savings bank said last Friday it was in talks to merge with several regional cajas -- Caja de Avila, Caja Insular de Canarias, Caixa Laietana, Caja Segovia and Caja Rioja.

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Spain has 45 savings banks and an increasing number are now in merger talks -- ailing from the collapse of the housing market -- amid some estimates that the country has 30% more bank branches than it needs.

2010-05-28 (AP) Cajamadrid, Spain's second-largest savings bank and its fourth-largest financial group, said it was in talks with five smaller savings banks about agreements to pool assets to provide each other with liquidity while retaining their individual brand names. La Caixa, Spain's largest savings bank and its third-largest financial institution, said it was negotiating to team up with a smaller regional competitor, Caixa Girona.

2010-05-25 (Expansion.com) CajaMurcia, CajaGranada, Sa Nostra, Caixa Penedes studying cold fusion

The four boxes alienated from the discussions with Caja Cantabria, Extremadura Caja Cajastur and now pose a cold junction. Those who were potential parteners of which now form the SIP by the CAM study the establishment of an Integrated System of Protection.

The union of these four entities could become the fourth or fifth volume of business entity, with over 100,000 million euros, or the sixth or seventh volume of active entity, with about 80,000 million.

2010-05-24 (BusinessInsider) The Spanish government has just moved to support its banking system again, forcing four major banks to combine in a bid to save their existence.

The move targets Cajastur, Caja de Ahorros del Mediterráneo, Caja Extremadura, and Caja Cantabria, according to Cotizalia.

It comes just hours after Spain's €530 million bailout of CajaSur.

The merger is not a full one, but brings four of Spain's largest banks into a loose conglomeration. Assets under management for the new firm are valued at €135 billion.

Details are scarce of what the final agreement, negotiated by the Bank of Spain, will look like, but it appears banks within the agreement will maintain significant autonomy.

Italy

2010-06-01 MarkIt reports Italian CDS are up 50bps, from 200 on Monday to 250bps, a new record.

May 25 (Bloomberg) -- Italy’s government will approve a measure to ban any cash transactions of more than 5,000 euros ($6,188) to clamp down on tax evasion, according to a lawmaker briefed on the plan by Finance Minister Giulio Tremonti.

Germany

(Der Spiegel) German President Horst Köhler announced his resignation on Monday in response to fierce criticism of comments he made about Germany's military mission in Afghanistan.

"I declare my resignation from the office of president -- with immediate effect," Köhler, with tears in his eyes and speaking in a faltering voice, said in a statement, flanked by his wife Eva-Luise.

Greece

May 26 (Reuters) - Greece is trying to renegotiate the terms of a drastic pension reform required under the terms of an economic rescue deal agreed this month with the EU and the IMF, senior government officials said.

No wonder the sentiment on the Euro is extremely bearish...