For weeks now, Spain and Germany have been playing a game of chicken. It now appears both sides are flinching.
In late May, Spanish Prime Minster Mariano Rajoy stubbornly declared that Spain did not need, nor would it seek a bailout of its struggling banks. Now reports are swirling Spain will do just that, as early as Saturday, following a Fitch downgrade Thursday.
According to Reuters, EU ministers are scheduled to hold a conference call on Saturday to discuss relief for Spain's troubled banks. "The government of Spain has realized the seriousness of their problem," a senior German official tells Reuters.
German officials, too, seem to have realized the seriousness of the situation, most notably Chancellor Angela Merkel.
"It is important to stress again that we have created the instruments for support in the euro zone and that Germany is ready to use these instruments whenever it may prove necessary," Merkel said Thursday.
Of course, the devilRead More »from Markets on Edge as Spain Blinks on Bailout