Eurozone Unravelling: Blue Skies in the Media, Rain Heading for Spain

By John Ward

‘U.S. money-market funds sharply increased the amount of euro-zone bank debt they held last month, according to Fitch Ratings, a sign they believe the worst of the debt troubles are over.’ (WSJ)

‘The European Central Bank is falling behind on a €40bn asset purchase programme launched at the height of eurozone crisis, in a sign it could be dropped as a first step towards unwinding huge emergency support for the region’s financial system.’ (FT)

So much for the bollocks. Now, the view from the Blogosphere…

‘Spain is already in as bad a shape as Greece. And it hasn’t begun any significant austerity measures yet. Having seen what austerity has done to Greece (Greek GDP shrank 6.8% in 2011 AFTER Greece received bailouts equal to 57% of its GDP), Spain is much less likely to opt for the bailout/ austerity measure program.The significance of this is HUGE. According to the Bank of International Settlements worldwide exposure to Spain is north of $1 TRILLION with Great Britain on the hook for $51 billion, the US on the hook for $187 billion, France on the hook for $224 billion and Germany on the hook for a whopping $244 billion…’ (ZH)

Yesterday, I posted about Berlin’s exit preparations. People on the whole saw it as old news. I see it as interesting in the context of an obviously unravelling eurozone. Spain is not only going to go its own way, it is going to defy Brussels. Germany is in turn drifting further and further away from the machinations of Mario Draghi.

There isn’t enough money on the planet to rescue Spain.

Let’s see what happens to Greece tomorrow – if anything. I’m going to do some digging around in Berlin.

I may have very limited access to the internet over the next few days. That and some research may mean I don’t post much. So have a good weekend…and ignore the budget, it doesn’t matter.

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