Wednesday 22 November 2017

Ambrose Evans-Pritchard: Don't be fooled, Spain has blinked ... and Germany has prevailed yet again

German Chancellor Angela Merkel
German Chancellor Angela Merkel

IT would be unkind to say that Spain has capitulated, but that is almost certainly what has happened. There will be a sovereign bail-out for Spain from the EFSF rescue fund. This is disguised (very slightly) by paying the money into Spain's state restructuring fund for banks FROB rather than the treasury, but that changes little.

It is the Spanish state that will bear the costs of recapitalising the banks, not the EU. Spain's public debt will shoot higher.

The Spanish press understands this perfectly well, as made clear this morning by Bernardo de Miguel in Cinco Dias.

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