Spain: Resisting a bail-out photo: Supermac1961
The background
Many commentators are predicting a European bailout for ailing Spanish banks, but the country’s Economic Minister insisted an intervention is not on the cards. “I have absolutely not discussed any intervention in Spain’s banks today,” said Luis de Guindos after an emergency EU summit in Brussels, reported The Times (£). Spanish leaders are keen to receive an injection of cash for the banking system but are unwilling to accept any EU financial package that would come with the sort of stringent conditions imposed on Greece.
Spain holds key to future of the euro
“The crisis in Spain, the euro zone’s fourth-largest economy, is seen in financial markets as the acid test for the survival of the European common currency,” said The Wall Street Journal. “The country is also widely considered too big to bail out, presenting Germany, which holds the euro-zone’s purse strings, with a gigantic headache.”
Spain gives lie to Brussels crisis narrative
“More or less reluctantly, we had come to accept the idea promoted by Brussels and Berlin that our economic woes were entirely our own fault, and that repentance and painful austerity could cure our sins,” wrote Miguel-Anxo Murado at The Guardian’s Comment is Free. But the economic crisis in Spain proves that this assessment was wrong: “The supposed solution, austerity, is softly killing Spain’s economy and it will provoke rather than help avoid a bailout,” Murado said. And Spain “defies the web of blame that Europe has woven around the unhappy ‘peripheral’ countries”.
The only solution is full integration
Monetary union “works only if fiscal union, banking union and economic policy union accompany it”, said Roger C. Altman in The Washington Post. Eurozone leaders have known this all along, and now is the time for action: “The time for Germany and all euro-zone members to get the emergency measures in place and commit to full integration is now. Global capital markets may not give them another month.”
Staying in eurozone will cost more than exit
“Outside the euro, countries could devalue, price themselves into the market and start exporting their way back to growth, as Britain did when it left the ERM in 1992,” wrote Conservative MP Daniel Hannan in The Telegraph. Brussels “eurocrats” are so focused on saving the single currency that they can’t seem to see the benefits to individual countries of making an exit, Hannan said. And arguments that saving the eurozone is crucial to European unity make no sense: “The euro, which was designed to soothe national antagonisms, is having the opposite effect.”