Dawn

Dawn

Thursday, May 06, 2010

Well, yesterday’s summit meeting between the Spanish President and Leader of the Opposition doesn’t appear to have been a great success. They’re reported to have agreed on only one item - a new law relating to the troubled savings banks. Coincidentally(?), Galicia’s two caixas finally decided yesterday evening to bow to political pressure and agreed a merger. To my surprise, the Galician Nationalist Party has criticised the developments, despite previously supporting the merger on the grounds it would prevent one with a bank from another region. Possibly they see the new law as exposing the new Galician entity to a later takeover by a ‘foreign’ bank. All a bit too complex for me.

After the meeting, President Zapatero intoned his standard comment that “There are reasons for confidence”. Which I was going to say was something of a hymn for him but perhaps I mean incantation. Either way, I’m not sure it’s working.

Ambrose this morning answered my question of whether current EU decisions are really economics-based – “Markets view the package for Greece as a politically-shaped response that cannot work because it shuts off the twin cures of debt restructuring and devaluation, leaving the burden of adjustment on the Greek people. If Greeks come to view the plan as a rescue for foreign banks and funds – as many already do – there is no chance of carrying the nation through five years of harsh austerity. . . . There is mounting concern that the IMF is squandering its fire-power on a dubious plan, rather than ring-fencing Greece with a controlled default and reserving its clout to defend a more credible line on Iberian debt – which is what really matters for Europe's banks. By failing to fix achievable priorities, the IMF risks a drift into deeper crisis.”

Later today he let the havering EU politicians have both barrels – “Let me be clear, the sky will not fall — unless the EU authorities let it fall. They have the wherewithal to head off a catastrophic systemic crisis, if they can overcome their national quarrels, muster political leadership, and move fast enough. The European Central Bank must come down off its high horse and launch a massive purchase of eurozone bonds — ie QE, printing money, eurocopters, call it what you want — which means tearing up the EU rule book in the process.” Ambrose ends by citing long-standing emergency plans for imposing capital controls on the eurozone. Shades of the UK in the 70s. That’s progress!

I asked yesterday about prevailing philosophies in Greece. Well, today comes this rather scurrilous take on the question from polemical British columnist, Rod Liddle. Living happily in Spain, I couldn’t possibly endorse his views. Well, not all of them anyway.

Finally . . . A 23 year old Spanish driver has been clocked doing the fastest ever speed on a Spanish road - 248kph. Or around 155mph. In the car with him were his girlfriend and two children. Who may not have been asked for their permission.

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