The European Summit which saw an agreement in principle to recapitalise Spain's weakest banks has unravelled in an alarming way. This setback for the Spanish economy and the Spanish government will mean a loss of market funding for Spain. The EU will then be faced with options of whether to monetise Spain's debt or or let it default since Spain is too big to bail out.
Ambrose Evans-Pritchard claims Merkel learned that she broke German law on the ESM rescue and that this is the reason that she and her finance minister have backpedalled on the deal they struck two weeks ago. But, of course, there has a been a vocal outcry against the deal in Germany as well because Merkel was rightly seen as having capitulated, making her look weak. No matter what the reason is, the effect is clear: Spain...
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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.