Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

Europe's betrayal of Spain
The Telegraph ^ | 9/27/2012 | Ambrose Evans-Pritchard

Posted on 09/27/2012 10:08:17 PM PDT by bruinbirdman

We discover – yet again, you might say – that Germany, Holland, and Finland will not stand behind their solemn pledge of solidarity when push comes to shove.

Spain’s premier Mariano Rajoy has been betrayed. Nobody should be entirely surprised if he and the Spanish arch-nationalists in his circle offer a condign riposte, and bring down the entire temple on the heads of the creditor powers.

He bit the bullet and agreed to the highly intrusive terms of a €100bn eurozone rescue for the Spanish banking system on a specific understanding: that the ESM bail-out fund would ultimately take over the burden by recapitalising Spain’s banks directly.

This deal has been breached. Can we believe anything that the Chancellor of Germany, the prime minister of Holland, and the prime minister of Finland say from now on? The EMU rescue edifice is built on sand.

You might say Mr Rajoy had no choice. But he did. There were those whispering in his ear that Spain should instead retake control over its own monetary, exchange, and sovereign policy levers, and break out of its debt-deflation trap.

Such a course might or might not be disastrous for Spain, depending on your analysis of EMU’s structural flaws, but it would certainly be disastrous for German and Dutch banks. (Given that it would cause the collapse of monetary union in the worst possible way).

The Spanish bubble was after all a joint venture. Spain was flooded with cheap capital from Germany and Holland that it could not prevent or control under the EMU system. Did the German and Dutch regulators recognise the danger, or try to stop the excesses? Not really. They were complicit.

The ECB’s uber-loose money (to help Germany when it was in slump) led to negative real interest

(Excerpt) Read more at blogs.telegraph.co.uk ...


TOPICS: Business/Economy; Crime/Corruption; Foreign Affairs; News/Current Events
KEYWORDS:

1 posted on 09/27/2012 10:08:19 PM PDT by bruinbirdman
[ Post Reply | Private Reply | View Replies]

To: bruinbirdman

Lets say you’ve got a nephew who’s screwed up. The family comes to support him, but he screws up again. The family supports him again - and again. Dump him or support him again? The blame doesn’t go on the family although it was probably the wrong thing in the first place.


2 posted on 09/27/2012 10:22:58 PM PDT by VanShuyten ("a shadow...draped nobly in the folds of a gorgeous eloquence.")
[ Post Reply | Private Reply | To 1 | View Replies]

To: bruinbirdman

The titled should read ‘Europe’s betrayal of Europe’. All of these socialists have exploited democracy’s unfortunate weaknesses to put in place a fascist superstate. I hope they all burn.


3 posted on 09/27/2012 10:34:43 PM PDT by Viennacon
[ Post Reply | Private Reply | To 1 | View Replies]

Ahhhh, sooo sad...Europe gave proto-Mexico the shaft in not bailing out for the eleventy-billionth time utter and complete irresponsibility.

You know what is funny, I work in Mexico a LOT, and when I talk to Mexicans down there, their opinion of Spain is very very low, they think the Spanish are clowns.


4 posted on 09/27/2012 11:00:48 PM PDT by dsrtsage (One half of all people have below average IQ. In the US the number is 54%)
[ Post Reply | Private Reply | To 3 | View Replies]

To: bruinbirdman

Hey Ambrose, don’t spend money you don’t have.


5 posted on 09/27/2012 11:04:45 PM PDT by vbmoneyspender
[ Post Reply | Private Reply | To 1 | View Replies]

To: VanShuyten
It all boils down to one inescapable fact. A country that doesn't control it's own currency in not a country at all. All the countries of Europe want to pretend they are both nations and not nations at the same time. Now they are stuck, because they know as soon as one of them reclaims their sovereignty the whole house of cards comes down.
6 posted on 09/28/2012 3:01:45 AM PDT by Hugin ("Most times a man'll tell you his bad intentions, if you listen and let yourself hear."---Open Range)
[ Post Reply | Private Reply | To 2 | View Replies]

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson