Two weeks ago I argued Europe is on the brink of something very big. But the Spanish deal is not it. After the deal, markets rallied initially but soon afterwards, Spanish and Italian sovereign bonds sold off and are at the still elevated crisis level above 6%. The so-called EuroTARP, allowing Spain to receive monetary assistance from Europe to bail out its bankrupt and undercapitalised banks, is a dismal failure.
The deal, which is to use money from the temporary or permanent European bailout facilities EFSF and ESM, is slated to give Spain's national bank restructuring facility FROB a 100 billion euro "line of credit" to extend to Spanish banks for recapitalisation. In double speak reminiscent of 1984, Spanish Premier Rajoy touted this bailout as a "victory" for t...
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Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator in print and on television for the past decade. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.