Spanish Caja to float its shares at 50% - 60% of book value!

The EU madness continues, a report, summarised in this post's headline above, has just been released, linked here, which includes the following:

A Spanish savings bank is set to offer a substantial discount on a stock market listing to lure investors into its planned initial share sale, as fear of contagion of Greece’s debt crisis has caused firms to offer higher returns for the risk of investing in a southern European bank.

Bankia, a Spanish caja that is looking to list in July, will establish a price range on its prospectus – to be published tomorrow – at around 0.5 or 0.6 times its book value, a banker involved in the deal told Financial News. Bankia declined to comment.

Any failure to lure enough investor interest would worsen Spain’s already delicate financial situation, as the country, like other European peripheral nations, tries to avoid following Greece, Ireland and Portugal into a bailout.

Surely it should be obvious, that if the book value is at or near to the real value then none or little discount, even allowing for due caution would be really necessary. Thus this Cajas must be permitted under Spanish accountancy rules and practise, and one presumes,within Spanish law- to carry a book value almost double the real value of the assets it holds.

If this practise is common in Spain, or even permissable, and is in effect for a largish percentage of all the many such savings banks, then why is not Spain near default as well as Greece? Because of another EU contrived blind eye - I'll be bound!

The true depths of Europes debts must be many times the large numbers already being bandied about for the certainty of the Greek default!