Spain: A Pyrrhic Victory

EUROZONE ABSURDITIES
The Spanish prime minister hails the $130 billion bailout for the country's banks as a victory. It shows just how degenerated the principles of responsible budgeting in the eurozone have become.

First, the banks (just like the Spanish state) have assumed debts and risks at a hair-raising speed and extent. This recklessness has now been awarded with a multi-billion cash infu...sion to the perpetrators, money taken away from European taxpayers by their respective governments in the name of "solidarity." Finally, the chieftain of the morose Spanish fiefdom calls the additional new debt, which breaches the Maastricht criterion of "no higher debt ceiling than 60% of the GDP by a whopping 115% and in theory should result in severe sanctions. But to celebrate such Pyrrhic victory, the Soviets in Brussels will yet again bend backwards to oblige the infamous and bankrupt debtor, just to keep him seemingly afloat. Voodoo reigns in Europe, and eventually the whole euro group will implode.

Does anyone on the planet think that the problems surrounding the credibility of the euro have been solved by the $130bn bailout of Spain’s banks? Does any overseas investor believe that a corner has been turned, when the German government continues to set its face against the mutualisation of debt?

We can only hope that Spanish prime minister Mariano Rajoy and European Commissioner Olli Rehn are, as politicians are wont to do, treating the public with contempt in trotting out these bromides. The alternative explanation, that they really believe the problem has been solved, is far more worrying.