Euro exit beats begging bowl, says Spanish elder statesman
Francisco Alvarez Cascos, the region’s president and former secretary-general of Spain’s ruling party, accused premier Mariano Rajoy of humiliating the nation by touring Europe with a “begging bowl”. [...]
Mr Cascos said the government is “utterly incompetent”, but warned that the deeper crisis is a “perverse” monetary system where capital flight from countries in distress is funding creditor states at zero rates. “This can’t go on for long, or we will have to think about leaving the euro before we are thrown out,” he said. [...]
[D]raft proposals for a European banking supervisor must be in place in September, clearing the way for the direct recapitalisation of Spanish banks by the ESM. The aim is to break the self-reinforcing link between crippled lenders and the state.
The hard reality is that law passed by the German Bundestag stipulates that Spain’s €100bn bank rescue is a loan to the Spanish government, whatever the EU summit document says. That is what markets care about.