June 11, 2012 / 5:06 PM / 7 years ago

Spanish rescue plan splits Europe's bailout club

ATHENS/DUBLIN (Reuters) - The friendly terms of an international rescue for Spain have encouraged Greek politicians to believe they can extract a better deal from creditors, but Ireland and Portugal, fellow members of the bailout club, appear more resigned to their fate.

In Greece, which votes in a general election on Sunday, the radical, leftist SYRIZA party seized on the lenient Spanish bailout announced at the weekend as evidence that austerity measures demanded of Athens in return for a European financial rescue plan had failed.

The party’s reading of the crisis, which involves tearing up the harsh terms of Greece’s 130-billion-euro ($160 billion) bailout and reopening negotiations with the European Union and the International Monetary Fund, had been “fully vindicated”, a spokesman said.

More mainstream political parties support the bailout for Greece but want to soften its terms rather than dump it altogether. Conservative leader Antonis Samaras spoke of the advantages of negotiating with Europe rather than fighting it.

His New Democracy is neck and neck in opinion polls with SYRIZA, but whichever party wins on June 17, it seems likely that the terms of Spain’s 100-billion-euro ($125 billion) rescue will put Athens on course for a new showdown with Brussels that could determine whether Greece remains in the euro.

The nature of the Spanish bailout did not escape the notice of ordinary Greeks, well-schooled in such matters after more than two years of non-stop crisis.

“Spain knew how to negotiate good terms for themselves,” said civil servant Yannis Telonis, 33. “It’s too late now for us to do the same. We have failed because we were the euro zone’s guinea pig.”

Some Greeks detected signs that European leaders are ready to concede more lenient terms as the euro zone debt crisis spreads.

“Since more countries are in the game, it’s good for us because we will have the grounds to negotiate over better terms,” said Eleni Karakoussi, 31, a saleswoman, who said she intended to vote for SYRIZA.

“I’m not afraid we will be forced to leave the euro zone. I’m tired of being afraid. I only hope that we will have jobs, a way to make ends meet after June 17.”


In Dublin, the government responded with irritation to suggestions that Spain had done a better job of negotiating with creditors that Ireland did when it secured an 85-billion-euro ($105 billion) bailout in two years ago.

“They got the exact same deal that we got,” Deputy Finance Minister Brian Hayes said during an interview with RTE radio when asked if Spain had got a better deal.

“That the money Spain is getting is cheaper than the money we are getting - that is fundamentally a lie,” he said,

While the Irish government has raised hopes that a bailout of Spain would help Ireland secure a better deal on refinancing some of the tens of billions of euros of debt the government took on to recapitalize its banks, it is not trying to change the terms of its EU/IMF bailout program.

Spanish Prime Minister Mariano Rajoy’s claims on Sunday that he scored a victory by securing aid without submitting to a full state rescue program further embarrassed the Irish government.

“Many Irish people looking at the deal today will be asking themselves why is there one set of conditions for us and another for Spain,” said Pearse Doherty, the finance spokesman of the opposition Sinn Fein party. “Clearly the Spanish government has secured a better deal.”

Portugal has reacted to the austerity and economic hardship attached to its 78-billion-euro ($97 billion) bailout with a stoicism that has some commentators reaching for their history books for explanations.

These could be rooted in the Salazar dictatorship, which only ended in 1974, a regime that promoted traditional Catholic ways and discouraged radical opposition.

“It (lack of resistance) has something to do with our history, with the way that people experienced the military regime,” said Elisio Estanque, a sociologist at Coimbra University. “Through doctrine, the regime exploited a certain Catholic conservatism. Salazar promised to end anarchism.”

Also in play may be the national characteristic of resignation, often expressed in Portugal’s melancholy fado music that dwells on feelings of ‘saudade’, or a sense of loss.

Or it may well be a feeling of resigned pragmatism now that the party is over.

“The general feeling is that people have accepted change because there is no choice,” said Antonio Barroso, an analyst at Eurasia Group.

Additional Reporting by Renee Maltezou and Harry Papachristou in Athens, Conor Humphries in Dublin and Axel Bugge in Grandola, Portugal; Writing by Giles Elgood, editing by Peter Millership

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