SPAIN 5 - 0 EUROZONE
Nope, it's not the latest soccer result, but the score of Spanish debtors against the eurozone creditors. It took me a couple of hours of "eurospeak" from colleagues to understand why the Spanish PM would call it a victory to assume $130 billion of new debt. For a while even the markets celebrated and rallied, against my sceptical warnings and misgivings. Since then, however, the markets have come to their senses: the euro dropped from $1.2660 to 1.2485, the yield of the 10-year Spanish bond soared to unsustainable 6.44% (after briefly falling under 6%), and stock markets reversed the earlier stampede.
In cynical eurospeak, my colleague opened my eyes: "Look Elgar, when a country already suffocating of sovereign debt of $1.2 trillion, and which all sides realize it can never repay, it must count as a victorious coup to receive an additional $130 billion from some idiots, until a delayed and inevitable bailout will ultimately wipe out the new amount of debt!"
Nope, it's not the latest soccer result, but the score of Spanish debtors against the eurozone creditors. It took me a couple of hours of "eurospeak" from colleagues to understand why the Spanish PM would call it a victory to assume $130 billion of new debt. For a while even the markets celebrated and rallied, against my sceptical warnings and misgivings. Since then, however, the markets have come to their senses: the euro dropped from $1.2660 to 1.2485, the yield of the 10-year Spanish bond soared to unsustainable 6.44% (after briefly falling under 6%), and stock markets reversed the earlier stampede.
In cynical eurospeak, my colleague opened my eyes: "Look Elgar, when a country already suffocating of sovereign debt of $1.2 trillion, and which all sides realize it can never repay, it must count as a victorious coup to receive an additional $130 billion from some idiots, until a delayed and inevitable bailout will ultimately wipe out the new amount of debt!"
I guess so...
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