We have demonized the word bailout, as if a bailout (of a government, a bank or several) were the end of the world. The bailout ends up coming, the population gets depressed and that does not financial aid raise confidence which is what we need most. People do not understand what a bailout is but are terrified of the word.

A bailout is when nobody lends money to a government, the European Union (EU) lends it the money that the markets are denying it. In the case of a bank, when the bank needs capital and cannot raise it in the market, the government puts that capital in (puts money into the bank and receives shares in return and becomes the main shareholder). If the government does not have that money, it is the EU that lends that money to the government so that it injects capital into the bank. This is precisely a bank bailout. This is what the EU did with Ireland. The Irish government received 67 billion (billions), 50 of which should be injected into the Irish banks.

Logically, the bailout comes with conditions. The lender attaches conditions to ensure that you pay back the money and that you use it for its intended purpose. This is normal. To deny it is absurd.

The rescue happens when you drown and you cannot get out of the water by yourself; someone comes and throws you a life preserver. The other alternative is to reject the financial aid and continue swimming against the current until you save yourself... or more likely drown. It indicates a lot of hubris, ignorance or quixotic spirit not to ask for financial aid when you are in bad shape.

The government has just apply for the financial aid from the EU (the bailout). The EU has committed to lend the FROB up to $100 billion to recapitalize troubled banks. Details on how much is being lent, who is lending it, to what deadline and to whom will be known when there is a clearer picture of the recapitalization needs of the banks. This uncertainty may be unwelcome by the markets.

Almost all European countries have injected money into their banks: France, Germany, Belgium, England, etc. In total, some 1,500 billion. Of course, they did it on time between 2008 and 2010 and not late as we did. To put Spain's figures in perspective: the rescue of banks with problems (which account for less than 25% of the Spanish banking system), will require 50-70 billion at most (provided that the non-economic status does not deteriorate extremely). England injected 100 billion in just three banks: RBS, Lloyds and Northern Rock. The problem is that the Spanish government now has no money to recapitalize its banks (it would have had it in 2008-09) and has to ask Europe for it.

Solving the banking problem is the first step for there to be credit , money to circulate and Economics to be reactivated. This 100 billion will not make the Economics grow tomorrow, but it will help it not to deteriorate further. And above all, it should help to gradually restore confidence. Although the entrance markets may not see it that way.