Skip to comments.Europe's betrayal of Spain
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.
Spains 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 Spains 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 EMUs 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 ECBs uber-loose money (to help Germany when it was in slump) led to negative real interest
(Excerpt) Read more at blogs.telegraph.co.uk ...
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.
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.
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.
Hey Ambrose, don’t spend money you don’t have.