A few weeks back, the EU’s Olli Rehn meandered down Manjana Way, and told the media that but a few tweeks here and there would see Spain emerging victorious from its austere cleansing. It was the signal the markets had been waiting for: no sooner had he stepped onto the plane home than Spanish bond yields began to spike.
That market reaction has since been vindicated and strengthened by the usual series of obdurate ‘Neins’ from Berlin. So now the task has fallen to Onanista in Chief, Eurogroup President Jean-Claude Junker, to reshape the squidgy reality balloon into a harmless little puppy.
“Spain’s macro-economic and budgetary policy is going in the right direction, and if and when Spain asks us to help its banking sector, it will obviously be done,” said Jean-Claude.
Fitch’s downgrade of Spain’s sovereign debt to Triple B status the night before gave an entirely different impression, but Juncker ignored all that, acting instead as if the Spanish request for emergency banking action wasn’t already a done deal.
One enormous clue to the truth of that lies in the Spanish government’s appointment of yet another technocrat parachutist to the governorship of the central bank. Luis Maria Linde was appointed the the Bank of Spain board only two weeks ago. He previously handled the commercial department at Spain’s Embassy to the Soviet Union, and is thus guaranteed to have all the necessary features to scare the crap out of the markets.
Equally loony was the decision by David Cameron to promise himself as the UK’s protector against “a giant superstate in Europe”. Based on Scameron’s track record with the EU, I’d rather be protected against pillaging Vikings by Graham Norton, but further still down the EU foodchain, the mentally deranged are running very little. In Greece, they are mainly starving.
On the island of Leros, the State Infirmary of Leroshas announced that it cannot meet its most basic remit, to keep the patients reasonably well fed. According to deputy governor of the institution, John Antiartis, the 350 mentally ill patients in residence there have become
malnourished in recent days, because the hospital has had to deal with critical food shortages .
An urgent letter sent two days ago (Wednesday) to the Greek Health Ministry and the president of the 2nd Health Region, Christina
Papanikolaou, informed the recipients that the hospital is no longer able to feed its mentally ill patients. “Pension funds owe us huge amounts, making the State Infirmary of Leros unable to pay its debts,” Antiartis explained, as he called on those responsible to address the issue immediately.
My corresondent on this issue adds, “The idea that Greece is being made a basket case as a special punishment seems to be gaining ground. Not too big to fail, but rather too small to make a fuss that matters. Anger is building here, as it is strongly suspected that whether a country gets ‘punished’ is about political size not debt size.”
I think he might be referring to Spain. You read the prediction here first.