Thursday 14 December 2017

Hamish McRae: Who will solve the euro crisis? Well, not the politicians that’s for sure

Spanish Prime Minister Mariano Rajoy
Spanish Prime Minister Mariano Rajoy

SO now it is Spain that will need a sovereign bailout. In an effort to increase confidence, the government says it has enough money to get through the autumn, but of course that has quite the opposite effect in that it emphasises that it will run out of money after that.

Only a few weeks ago, the Spanish Prime Minister, Mariano Rajoy, was denying that there would be sharp tax increases and said that seeking eurozone funds to rescue the banks was not a sovereign rescue. Then VAT was put up by 3 per cent. And now is it even more evident that the country needs a full bailout.

The bluster and self-deception so characteristic of eurozone politicians is evident once again. What is so strange is that politicians feel compelled to go through the established sequence of downplaying their financial problems, then blaming foreign speculators, then conceding that they might need external help, then finally capitulating or being thrown out.

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