James Fitzsimons: Something had to give -- finally it was the Germans
We need to fight for a deal on debt now Italy and Spain have fought their corners, writes James Fitzsimons
It took two heavyweights, Italy and Spain, to finally get the Germans to back down and give some financial leeway to financially troubled countries in the EU.
This isn't the beginning of the recovery, but it is the first sign that the Germans are loosening the stranglehold they had on the rest of us. Sooner or later, something had to give.
Spain is seeking €100bn to help stabilise its banks. With Italy's help, it has forced the EU to agree that the funds it needs can be lent directly to the banks without holding the sovereign to ransom. But this won't happen until the end of the year when the ECB takes over bank supervision in the eurozone. Meanwhile, financial pressure should be taken off Italy as the ECB commits to buy up Italian bonds. Financial markets have reacted positively to the news. But it's a bit early to have a party.