MADRID | Any train traveller knows by heart the stern warning on the danger that lies in leaning out. Italians seem to pay due attention to this caution, living permanently in a risky environment. Downplaying their own problems has led them to slip to second line positions leaving Spaniards as forerunners of the raging euro battle. Spain has behaved in a most divergent way. Confronted with a looming banking crisis,…
text your ex back MADRID | For the first time since the crisis unfolded, Germany is starting to cast serious doubts on the euro zone sustainability. Acting as paymaster general involves such a woeful toll as to think twice before continuing to foot a growing bill likely to snowball out of control. It is under the uneasy impression that money spent on saving others is simply burned off. The temporary…
MADRID | You can fool someone for a long run. You may fool many people for a while. But you cannot pretend to fool everybody forever. Claims on Saturday that the deal only amounted to European lending for Spanish banks did not stand up to the week-end erosion. It was clear from the start that the money was to be channelled through a public body and fully covered by a…
MADRID | All of the sudden, the feeling things might be spinning out of control has cast a gloomy mood in Spain. For a country lavishly living on others savings, finding itself short of cash has come as a shock-horror revelation. It now faces the unsparing rigour of lying in the hands of fickle and merciless markets. The deep-rooted assumption that confidence gap would be bridged as soon as the…
MADRID | We have a case for demanding some support in resisting the current run on us, our most solid argument being that something nasty might happen to the euro should we fall in the abyss. The one based on the merits of performing our homework seems less convincing. For all the reforms undertaken, we still have a long way to go in redressing a dismal record. Sheer lack of money…
MADRID | Bankia’s Chairman brilliant performance in transforming the hole he found in his company as an opportunity to ransack the public coffers, has turned him in government’s shadow financial policy maker. His recipe to cure banking ills will receive little praise in economic circles. But it sounds extremely simple and effective. Writing down bad loans resorting to taxpayers’ money amounts to a rather dull endeavour. Bur indulging in such…
MADRID | Utter disarray might sound a mild and tender description for the knock out effect BANKIA crash landing has inflicted on Spain’s credibility. Only a few days ago, the government downsized the issue to a trifle €7 billion support. The bill runs now at €24 billion, with the prospect to rise still higher. Spending such a huge pile of money doesn’t stand as the most worrying fact. After all,…
MADRID | A few weeks ago, the Spanish government adamantly denied any hint on disbursing a single penny in banking sector support. A few days ago, it acknowledged the necessity to do just the opposite for anchoring ailing entities. In a desperate face saving attempt it discarded such a funding might lead to open aid, support being provided at a punitive 10% interest rate. But BANKIA discomfiture has led to a…
MADRID | The Spanish financial system badly needs to get equipped with a survival kit. Not only has it been left stranded in a highly hostile territory. Its guide and guardian may have developed a rare taste for inflicting damage on it. There can be no other plausible clue to explain the Economy minister’s statement at the outcome of the last Ecofin meeting. He flatly acknowledged there were good reasons to…
MADRID | Markets have been plunged into utter chaos by the Greek political deadlock and the prospect parties staunchly opposed to the EU bail out plan may have the upper hand in the incoming elections. Panic has also been driven by light comments picturing Greece’s eviction from the euro as an anodyne and somehow inevitable event. Such a bullish appraisal does not emerge from Anglo Saxon analysts so much inclined to…