European Union finance ministers approved a plan Thursday for dealing with future bank bailouts, forcing bondholders and shareholders to take the hit for bank rescues ahead of taxpayers.The new framework requires bondholders, shareholders and large depositors with over 100,000 euros to be first to suffer losses when banks fail. Depositors with less than 100,000 euros will be protected. Taxpayer funds would be used only as a last resort.
The European Union spent the equivalent of a third of its economic output on saving its banks between 2008 and 2011, using taxpayer cash but struggling to contain the crisis and - in the case of Ireland - almost bankrupting the country.But a bailout of Cyprus in March that forced losses on depositors marked a harsher approach that can now, following Thursday's agreement, be replicated elsewhere.
- -An average of 134 retail outlets are shutting down in Italy every single day. Overall, 224,000 retail establishments have closed down in Italy since 2008.
- -It is being projected that Italy will need to ask for an EU bailout within 6 months.
- -Consumer confidence in France has dropped to an all-time low.
- -The unemployment rate in France is up to 10.4 percent. That is the highest that it has been in 15 years.
- -Government is now responsible for 57 percent of all economic output in France.
- -In May, household lending in Europe declined at the fastest pace in 11 months.
- -During the first quarter, disposable income in the UK declined at the fastest pace in 25 years.
- -It is being projected that the unemployment rate in Spain will hit 28.5 percent next year.
- -Just a few years ago, the percentage of bad loans in Spain was under 2 percent. Now it is sitting at 10.87 percent.
- -The national debt in Spain has grown by 19.1 percent over the past 12 months alone.
- -The Greek government says that the Greek economy will shrink by 4.5 percent this year.
- -It is being projected that the unemployment rate in Greece will rise to 30 percent in 2014.