Spanish
life is not always likeable but it is compellingly loveable.
-
Christopher Howse: A
Pilgrim in Spain.
Spain
- I mentioned yesterday the absence of a mention of Modelo 720 in an El País article. Bang on cue comes this article.
- On the theme of self-censorship . . . The mainstream media has stopped operating as the fourth power of state.
Life in Span
- So, yesterday I went to the shop to finally get my hands on my packet, a camera cable. I showed the woman the email from Seur with the reference number on it. She asked for my name and then sight of my (expired) ID, as if there were any chance whatsoever that I might not be me. Satisfied that I was, she then asked me to 'sign' her PDA. As I say, I've given up expecting common sense in these circumstances. This, I suspect, is what foreigners mean when they say Spaniards have not been taught – either by parents or at school - to think and problem-solve. And so they act like passive automatons. Even, claims Vincent Werner, arriving at university with these inadequacies.
- But are things so bad in the expat communities of the south, or have service suppliers down there – or in Madrid and Barcelona – been forced to raise their standards and stop wasting their customers' time and energy? Lenox??
- As I set off to walk to the taller last evening to pick up my car, one of my neighbours offered me a lift down the hill. As it was pouring with rain, I accepted. She then drove a kilometre entirely in 2nd gear, with no belt on and with one hand holding her phone to her ear as she talked/shouted. I'm tempted to say that nothing could be more Spanish than this but that would probably be too harsh. I'll confine myself to saying she's a university graduate.
- A simple contrast . . . Yesterday I called the parent company of a Dublin company I was trying to reach and told them that the message on the latter's number was that the office was closed for the weekend. I got an immediate helpful response and was then asked what number I'd called so that a check could be made on what had gone wrong. Just a little bit of initiative but there must be a reason why I was surprised at it . . .
- I now actually believe that reductions in staff and the introduction of machines have reduced customer service levels in the years I've been here in Spain. I used to admire the local subsidiary of the UK's Direct Line insurance company but my recent experiences with Línea Directa have not been good. Again, I wonder what the experience of others is like.
- Anyway . . . Everyone who lives in Spain knows that Spanish kids have an inalienable right to endlessly disturb adults. Here's what happened when the foolish owners of a bar tried to buck the system.
The EU
- Here's the profile of another very powerful german. God's man in Brussels. Who obviously lives rather well. The sort of prelate one sees in Castelao paintings/cartoons. In fact, he looks exactly like the priest in this one:-
- The Bundesbank is back in charge, says Ambrose Evans Pritchard in the article below. With major implications for Italy.
- The famous democratic deficit: The Keystone Cops nature of Britain’s departure has diverted attention from a chronic and ever-urgent issue – the EU still needs to be democratised. More on this here.
The UK
- As noted, London is being taken to the cleaners by the EU technocrats over the Brexit. Of course, the latter have a couple of immense advantages. Firstly, they don't have to deal with divided/cynical/unsupportive political parties back home. Secondly, they're simply unaccountable to anyone. Near, medium and long term. So can say and do whatever they like. Even to the extent of damaging the EU in the interests of - as they see it - protecting The Project.
The Gender Wars
- Below is a nice article from a chap who says that in the 'unforgiving sex war' he prefers to remain a conscientious objector. As he puts it: I start from the once-commonplace position that the difference between the sexes is deep but the need of each for the other is deeper. Which sounds about right to me. Permanently surrounded as I am by the strange - but wonderful -creatures.
Finally
- It hasn't been a good week:-
- The cable I eventually picked up at
the shop doesn't work.
- I left my umbrella in a café in
Vigo. Need I say it wasn't turned in.
- I got an estimate for the repair to
the front of my car caused a couple of months ago when I drove it – very slowly – into a large (but non-visible to me) granite block. Parts
€2,440, labour €1500. Plus (maybe) tax. And all this merely to
repair only superficial damage. So, merely cosmetic. Guess what I decided.
- Two nights ago, I wrote about my year
diving on the coral reef in the Seychelles when I was 19. This
morning it's reported that it's dying.
So, I keep playing this to myself.
THE ARTICLES
1. In the unforgiving sex war, I prefer
to remain a conscientious objector: Charles Moore
Columnists are supposed to have strong opinions. I do my best to oblige. For this reason, I rarely write about what are rather clumsily described as “women’s issues”. Possibly this proves my cowardice, but I claim a different reason. In the sex war, I am a conscientious objector. I start from the once-commonplace position that the difference between the sexes is deep, but the need of each for the other is deeper. After all, the future of the human race is at stake.
If I were a conscript in the sex war, I might not be steady on parade. I don’t enjoy several things which traditionally obsess my sex – team sport, machines with wheels or wings, DIY, computers, formalised jokes (“there was this man went into a pub…”), Jeremy Clarkson.
Indeed, I prefer activities which might be considered fraternising with the enemy – areas traditionally dominated by women, such as gossip, clothes, novels, pictures, talking about children and relationships, food, feelings. The only “female” subject which bores me is health.
It is not, I hope, that I am disloyal to my sex – I am as competitive, argumentative, boastful, pseudo-rational, evasive of housework and fond of lists as the next man. I even believe that there are distinctive male qualities and roles which should be defended. It is just that when battle starts, each side deteriorates.
You can see this among men who hit back when assailed by feminism and political correctness. There is something unappealing in the semi-comic terms we use – “the sisterhood”, “harpies”, “cat-fight”, putting the word “la” before the name of the woman we are attacking. “Where’s your sense of humour?” we ask, displaying a defect in our own. In the 1970s, whenever Margaret Thatcher entered the Commons chamber, male Labour MPs used to make squeaking noises to mock her voice. Social media reveal that many men today still want to make such noises against women, especially anonymously.
Besides, there are some real issues with which women, much more than men, must contend. The most obvious is physical fear of the opposite sex, including fear of rape. The next most obvious is the work/life balance for mothers. Less obvious, but perhaps no less real, are the issues about power, status, independence, looks, age and so on which characterise our time.
A trivial example illustrates this. When I edited this paper, a distinguished American liberal columnist came to see me. I had someone else with me, so the first person he met was the deputy editor, Sarah Sands (now the editor of the BBC Today programme), who is small and was then young. He immediately said to her “Coffee with sugar”. Sarah found his mistake more funny than shocking, and soon got her own back, but the point is that this happened to her solely because she was a woman. Women still have many such experiences, or much worse. As men, we don’t often have them, so we often don’t notice them.
All of the above being so, why should we not be deluged, as we have been recently, with stories about man’s inhumanity to woman? What’s wrong with #MeToo, Time’s Up, exposées of the gender pay gap, Amber Rudd’s penalties for non-violent domestic abuse, claims that the ghastly John Bercow bullied a female Commons clerk, Birmingham City Art Gallery removing a Victorian painting because of its supposed attitude to young women, Manchester being renamed Womanchester for International Women’s Day, and goodness knows how many other stories?
Not easy to say, since some of the wrongs highlighted are real. Yet I think the sheer accumulation is a bad sign. We are being propagandised.
On Thursday night, I took part in a very enjoyable Telegraph evening, called “One Year to Brexit”, with Boris Johnson. Boris was wearing a badge – a gold-rimmed triangle with a red middle. What did it signify, I asked, before we went on stage. He said it was to oppose female genital mutilation.
Why that badge, I found myself wondering? I don’t doubt Boris’s sincerity: FGM is a horrible thing. But so is North Korea’s nuclear bomb. So is the neglect of the old in British hospitals, or Russia’s habit of murdering its enemies. So is Isil, a grouping so monstrous that FGM (in which it exults) scarcely comes in the first rank of its crimes.
There are a thousand evils which you could wear a badge against.
The fact that the Foreign Secretary chooses FGM shows the way morality is becoming a permanent PR campaign rather than an answer to the eternal question, “How should we live?” No doubt if he had refused to wear the badge he would have been accused of callousness by pressure groups. This is virtue’s fashion statement, not virtue itself. Our Cabinet ministers should be unbadged.
As with all fashion, absurdity passes almost unnoticed. In her famous “car-crash” Channel 4 News interview of the anti-feminist thinker Jordan Peterson, Cathy Newman passionately asserted that senior women BBC presenters getting less than the men is proof of the oppression of women worldwide. Since the entire BBC debate is about people who earn more than the Prime Minister, out of a compulsory tax levied on millions who are far, far poorer, hers was the voice of privilege. She could not see that.
Fairness drops out too. The “gender pay gap” is treated as an indisputable fact, yet the assumption on which its computations are based – find out the average pay difference and you can measure the injustice – is highly contestable. In the debates about the economic wrongs done to women, the situation of men is less heard. Among couples,the man is still, in the majority of cases, the breadwinner. Women may suffer from the social expectation that they should be paid less. Men may suffer from the expectation that they should work more.
Worse than absurdity or unfairness is what, to use the language of the activists, is “hate speech”. In the prevailing discourse, men are bad; white men are worse; “privileged white men” are the only group about whom anything nasty can be said. If such men defend themselves or their fellows, they are guilty of “himpathy”.
More than 50 years after Martin Luther King called for people to be judged, “not…by the colour of their skin, but by the content of their character”, this reverse discrimination is a regression. He had a dream that little black boys and girls and little white ones would be able to “join hands”. He cannot have envisaged a culture in which girls would be brought up to regard boys as the untouchable enemy.
I often think that the relations between the sexes are a better subject for literature than for politics. This is because they depend upon the imagination, the capacity of human beings to understand difference and to enjoy it. A great novelist enters into the character of the opposite sex – think of George Eliot and men, Anthony Trollope and women. This is more difficult than entering into the character of one’s own, but correspondingly more exciting. It is the encounter with “the other” – an exercise which, in other contexts, the politically correct strongly advocate.
Few of us are great novelists, but most of us know a little of what it means to trust and love a person born different from ourselves. It sometimes feels as if modern feminism is trying to forbid this, which is desperately sad.
Columnists are supposed to have strong opinions. I do my best to oblige. For this reason, I rarely write about what are rather clumsily described as “women’s issues”. Possibly this proves my cowardice, but I claim a different reason. In the sex war, I am a conscientious objector. I start from the once-commonplace position that the difference between the sexes is deep, but the need of each for the other is deeper. After all, the future of the human race is at stake.
If I were a conscript in the sex war, I might not be steady on parade. I don’t enjoy several things which traditionally obsess my sex – team sport, machines with wheels or wings, DIY, computers, formalised jokes (“there was this man went into a pub…”), Jeremy Clarkson.
Indeed, I prefer activities which might be considered fraternising with the enemy – areas traditionally dominated by women, such as gossip, clothes, novels, pictures, talking about children and relationships, food, feelings. The only “female” subject which bores me is health.
It is not, I hope, that I am disloyal to my sex – I am as competitive, argumentative, boastful, pseudo-rational, evasive of housework and fond of lists as the next man. I even believe that there are distinctive male qualities and roles which should be defended. It is just that when battle starts, each side deteriorates.
You can see this among men who hit back when assailed by feminism and political correctness. There is something unappealing in the semi-comic terms we use – “the sisterhood”, “harpies”, “cat-fight”, putting the word “la” before the name of the woman we are attacking. “Where’s your sense of humour?” we ask, displaying a defect in our own. In the 1970s, whenever Margaret Thatcher entered the Commons chamber, male Labour MPs used to make squeaking noises to mock her voice. Social media reveal that many men today still want to make such noises against women, especially anonymously.
Besides, there are some real issues with which women, much more than men, must contend. The most obvious is physical fear of the opposite sex, including fear of rape. The next most obvious is the work/life balance for mothers. Less obvious, but perhaps no less real, are the issues about power, status, independence, looks, age and so on which characterise our time.
A trivial example illustrates this. When I edited this paper, a distinguished American liberal columnist came to see me. I had someone else with me, so the first person he met was the deputy editor, Sarah Sands (now the editor of the BBC Today programme), who is small and was then young. He immediately said to her “Coffee with sugar”. Sarah found his mistake more funny than shocking, and soon got her own back, but the point is that this happened to her solely because she was a woman. Women still have many such experiences, or much worse. As men, we don’t often have them, so we often don’t notice them.
All of the above being so, why should we not be deluged, as we have been recently, with stories about man’s inhumanity to woman? What’s wrong with #MeToo, Time’s Up, exposées of the gender pay gap, Amber Rudd’s penalties for non-violent domestic abuse, claims that the ghastly John Bercow bullied a female Commons clerk, Birmingham City Art Gallery removing a Victorian painting because of its supposed attitude to young women, Manchester being renamed Womanchester for International Women’s Day, and goodness knows how many other stories?
Not easy to say, since some of the wrongs highlighted are real. Yet I think the sheer accumulation is a bad sign. We are being propagandised.
On Thursday night, I took part in a very enjoyable Telegraph evening, called “One Year to Brexit”, with Boris Johnson. Boris was wearing a badge – a gold-rimmed triangle with a red middle. What did it signify, I asked, before we went on stage. He said it was to oppose female genital mutilation.
Why that badge, I found myself wondering? I don’t doubt Boris’s sincerity: FGM is a horrible thing. But so is North Korea’s nuclear bomb. So is the neglect of the old in British hospitals, or Russia’s habit of murdering its enemies. So is Isil, a grouping so monstrous that FGM (in which it exults) scarcely comes in the first rank of its crimes.
There are a thousand evils which you could wear a badge against.
The fact that the Foreign Secretary chooses FGM shows the way morality is becoming a permanent PR campaign rather than an answer to the eternal question, “How should we live?” No doubt if he had refused to wear the badge he would have been accused of callousness by pressure groups. This is virtue’s fashion statement, not virtue itself. Our Cabinet ministers should be unbadged.
As with all fashion, absurdity passes almost unnoticed. In her famous “car-crash” Channel 4 News interview of the anti-feminist thinker Jordan Peterson, Cathy Newman passionately asserted that senior women BBC presenters getting less than the men is proof of the oppression of women worldwide. Since the entire BBC debate is about people who earn more than the Prime Minister, out of a compulsory tax levied on millions who are far, far poorer, hers was the voice of privilege. She could not see that.
Fairness drops out too. The “gender pay gap” is treated as an indisputable fact, yet the assumption on which its computations are based – find out the average pay difference and you can measure the injustice – is highly contestable. In the debates about the economic wrongs done to women, the situation of men is less heard. Among couples,the man is still, in the majority of cases, the breadwinner. Women may suffer from the social expectation that they should be paid less. Men may suffer from the expectation that they should work more.
Worse than absurdity or unfairness is what, to use the language of the activists, is “hate speech”. In the prevailing discourse, men are bad; white men are worse; “privileged white men” are the only group about whom anything nasty can be said. If such men defend themselves or their fellows, they are guilty of “himpathy”.
More than 50 years after Martin Luther King called for people to be judged, “not…by the colour of their skin, but by the content of their character”, this reverse discrimination is a regression. He had a dream that little black boys and girls and little white ones would be able to “join hands”. He cannot have envisaged a culture in which girls would be brought up to regard boys as the untouchable enemy.
I often think that the relations between the sexes are a better subject for literature than for politics. This is because they depend upon the imagination, the capacity of human beings to understand difference and to enjoy it. A great novelist enters into the character of the opposite sex – think of George Eliot and men, Anthony Trollope and women. This is more difficult than entering into the character of one’s own, but correspondingly more exciting. It is the encounter with “the other” – an exercise which, in other contexts, the politically correct strongly advocate.
Few of us are great novelists, but most of us know a little of what it means to trust and love a person born different from ourselves. It sometimes feels as if modern feminism is trying to forbid this, which is desperately sad.
2. The Bundesbank back in charge of ECB,
sending shivers through Italy: Ambrose Evans Pritchard.
The European Central Bank has dropped its long-standing pledge to boost stimulus if conditions deteriorate, signalling the triumph of German-led hawks and marking a major turning point in the eurozone’s monetary regime. The approaching end to the QE-era pulls away the protective shield for Italy and the high-debt Latin states, and for thousands of “zombie companies” kept afloat on monetary life-support.
Mario Draghi, the ECB’s president, successfully deflected attention from the policy shift by breaching central bank etiquette and attacking the Trump administration’s tariffs on steel.
“Unilateral decisions are dangerous. If you put tariffs against those who are your allies, one wonders who the enemies are," he said.
The ECB’s pious defence of the trade system may irk Washington, since the EU has higher protectionist barriers than the US. The eurozone’s current account surplus topped $485bn (£350bn) last year, or 3.5% of GDP, and is now the biggest single distortion to the global trading system.
While part of the eurozone surplus reflects ageing demographics, the scale chiefly stems from policies framed by neo-mercantilist ideology that it refuses to change. This was made worse by fiscal contraction imposed on southern Europe during the EMU banking crisis, which crushed internal demand and forced the Latin bloc to claw its way back to viability through exports. Peter Navarro, Mr Trump’s trade adviser, blames Europe for dumping the consequences of its own warped pathologies onto the rest of the world.
The ECB’s shift in guidance amounts to a tightening of policy, even though the bank admitted that it will not come close to achieving its 2% inflation target this decade. This leaves the eurozone with minimal safety buffers in the next cyclical downturn, vulnerable to a Japanese deflation trap. “They are going to face a problem when the next shock hits,” said Lars Christensen from Markets & Money Advisory.
The ECB has been soaking up eurozone sovereign bonds for the last three years under its QE programme, masking the true fiscal position of vulnerable states. This "golden age" is coming to end. The loss of the ECB shield leaves Italy nakedly exposed to market discipline at a delicate time: in the grip of populist convulsion following the rout of pro-euro elites.
Bond purchases have fallen from a monthly peak of €80bn (£70bn) to €30bn. This reduction has already had powerful effects. Janus Henderson says its key gauge of money supply growth – real six-month M1 – has dropped to the lowest level since the Great Recession. It points to a marked economic slowdown later this year.
The bond-buying scheme will expire at the end of September. While it can in theory by extended – and may be softened by a symbolic taper until December – the bar for further QE is high. “A major shock would be required for the ECB to change its mind,” said Frederik Ducrozet from Pictet.
There are technical reasons for this. The ECB’s balance sheet will reach 44% of GDP by the autumn, beyond levels thought safe by the US Federal Reserve. Former Fed chief Alan Greenspan says the ECB is already out of its depth in treacherous waters.
There are also political reasons. Germany is on the cusp of overheating. There is mounting anger in the Bundestag – where the anti-euro AfD party chairs the budget committee – over the true motives for emergency policies so late in the business cycle. Real interest rates in Germany are minus 2.5%, evoking cultural memories of Weimar.
The Governing Council has in any case tied its own hands by signalling that further QE would risk illegal financing of governments. This leaves the ECB in an invidious position if there are further court challenges.
The unanimous decision on Thursday to drop the "easing bias" is the clearest sign yet that doves cannot keep testing the political patience of the German, Dutch, Slovak, and Nordic central banks.
As September draws nearer, all those kept afloat by QE and easy money policies may come under scrutiny. Barnaby Martin from Bank of America says 9% of Europe’s companies are walking dead with interest payment costs above their earnings. This has led to a systemic misallocation of capital that will come home to roost. “The liquidity support for zombie companies will fall away. Europe may experience a "flash" jump in default rates,” he said.
The problem for Italy is that QE has flattered its fiscal profile. Fabio Balboni from HSBC says the ECB has mopped up half the gross supply of Italian debt and shaved at least 100 basis points off Rome’s borrowing costs. The underlying picture – adjusted for the cycle – has been worsening. A depreciation allowance of up to 250% turbo-charged investment and gave the economy a sugar rush, but only by drawing forward fiscal stimulus.
The country must refinance debt equal 17% of GDP this year, one of the highest ratios in the world. There are no obvious buyers. Italian banks have been selling, rotating the proceeds into accounts in Germany or Luxembourg. It is slow capital flight. This pushed Italy’s Target2 liabilities in the ECB’s internal payment system to a record €444bn even before the victory of the Five Star Movement and the anti-euro Lega in the elections. It may take a much higher yield to entice the money back.
Italy has little margin for error since public debt has risen to 132% of GDP, near the limits for a country with no sovereign currency. The trend growth rate of the economy after two decades of structural depression and labour hysteresis is too low to whittle away the burden.
Bad loans in the banking have come down to 15.3% after the clean-up of Unicredit’s liabilities but this is still high. Lending has not recovered. The state rescue of Monte Paschi has turned into a bottomless pit. Banco Carige and Credito Valtellinese are still in trouble.
Mr Draghi made a heroic effort to talk down the implications of the ECB’s tightening tilt and fool the markets. He did succeed in weakening the euro. But there are limits to his magic. The Bundesbank is back in charge.
The European Central Bank has dropped its long-standing pledge to boost stimulus if conditions deteriorate, signalling the triumph of German-led hawks and marking a major turning point in the eurozone’s monetary regime. The approaching end to the QE-era pulls away the protective shield for Italy and the high-debt Latin states, and for thousands of “zombie companies” kept afloat on monetary life-support.
Mario Draghi, the ECB’s president, successfully deflected attention from the policy shift by breaching central bank etiquette and attacking the Trump administration’s tariffs on steel.
“Unilateral decisions are dangerous. If you put tariffs against those who are your allies, one wonders who the enemies are," he said.
The ECB’s pious defence of the trade system may irk Washington, since the EU has higher protectionist barriers than the US. The eurozone’s current account surplus topped $485bn (£350bn) last year, or 3.5% of GDP, and is now the biggest single distortion to the global trading system.
While part of the eurozone surplus reflects ageing demographics, the scale chiefly stems from policies framed by neo-mercantilist ideology that it refuses to change. This was made worse by fiscal contraction imposed on southern Europe during the EMU banking crisis, which crushed internal demand and forced the Latin bloc to claw its way back to viability through exports. Peter Navarro, Mr Trump’s trade adviser, blames Europe for dumping the consequences of its own warped pathologies onto the rest of the world.
The ECB’s shift in guidance amounts to a tightening of policy, even though the bank admitted that it will not come close to achieving its 2% inflation target this decade. This leaves the eurozone with minimal safety buffers in the next cyclical downturn, vulnerable to a Japanese deflation trap. “They are going to face a problem when the next shock hits,” said Lars Christensen from Markets & Money Advisory.
The ECB has been soaking up eurozone sovereign bonds for the last three years under its QE programme, masking the true fiscal position of vulnerable states. This "golden age" is coming to end. The loss of the ECB shield leaves Italy nakedly exposed to market discipline at a delicate time: in the grip of populist convulsion following the rout of pro-euro elites.
Bond purchases have fallen from a monthly peak of €80bn (£70bn) to €30bn. This reduction has already had powerful effects. Janus Henderson says its key gauge of money supply growth – real six-month M1 – has dropped to the lowest level since the Great Recession. It points to a marked economic slowdown later this year.
The bond-buying scheme will expire at the end of September. While it can in theory by extended – and may be softened by a symbolic taper until December – the bar for further QE is high. “A major shock would be required for the ECB to change its mind,” said Frederik Ducrozet from Pictet.
There are technical reasons for this. The ECB’s balance sheet will reach 44% of GDP by the autumn, beyond levels thought safe by the US Federal Reserve. Former Fed chief Alan Greenspan says the ECB is already out of its depth in treacherous waters.
There are also political reasons. Germany is on the cusp of overheating. There is mounting anger in the Bundestag – where the anti-euro AfD party chairs the budget committee – over the true motives for emergency policies so late in the business cycle. Real interest rates in Germany are minus 2.5%, evoking cultural memories of Weimar.
The Governing Council has in any case tied its own hands by signalling that further QE would risk illegal financing of governments. This leaves the ECB in an invidious position if there are further court challenges.
The unanimous decision on Thursday to drop the "easing bias" is the clearest sign yet that doves cannot keep testing the political patience of the German, Dutch, Slovak, and Nordic central banks.
As September draws nearer, all those kept afloat by QE and easy money policies may come under scrutiny. Barnaby Martin from Bank of America says 9% of Europe’s companies are walking dead with interest payment costs above their earnings. This has led to a systemic misallocation of capital that will come home to roost. “The liquidity support for zombie companies will fall away. Europe may experience a "flash" jump in default rates,” he said.
The problem for Italy is that QE has flattered its fiscal profile. Fabio Balboni from HSBC says the ECB has mopped up half the gross supply of Italian debt and shaved at least 100 basis points off Rome’s borrowing costs. The underlying picture – adjusted for the cycle – has been worsening. A depreciation allowance of up to 250% turbo-charged investment and gave the economy a sugar rush, but only by drawing forward fiscal stimulus.
The country must refinance debt equal 17% of GDP this year, one of the highest ratios in the world. There are no obvious buyers. Italian banks have been selling, rotating the proceeds into accounts in Germany or Luxembourg. It is slow capital flight. This pushed Italy’s Target2 liabilities in the ECB’s internal payment system to a record €444bn even before the victory of the Five Star Movement and the anti-euro Lega in the elections. It may take a much higher yield to entice the money back.
Italy has little margin for error since public debt has risen to 132% of GDP, near the limits for a country with no sovereign currency. The trend growth rate of the economy after two decades of structural depression and labour hysteresis is too low to whittle away the burden.
Bad loans in the banking have come down to 15.3% after the clean-up of Unicredit’s liabilities but this is still high. Lending has not recovered. The state rescue of Monte Paschi has turned into a bottomless pit. Banco Carige and Credito Valtellinese are still in trouble.
Mr Draghi made a heroic effort to talk down the implications of the ECB’s tightening tilt and fool the markets. He did succeed in weakening the euro. But there are limits to his magic. The Bundesbank is back in charge.
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