The Great Obfuscation

26 Jul, 2012 at 09:26 | Posted in Economics | Comments Off on The Great Obfuscation

As I commented on yesterday, the Spanish and Italian prospectives for the future look desperately bleak and there are today every sign that the euro crisis is spinning out of control.

And still

l’euro n’est absolument pas en danger et la monnaie unique est irréversible”

according to European Central Bank President Mario Draghi.

As if this wasn’t enough, Financial Times now reports:

Germany on Tuesday threw its considerable weight behind the reform and austerity programme of the Spanish government, in the face of a continuing surge in the cost of borrowing for Madrid, and strong protests against its spending cuts.

A joint statement by Wolfgang Schäuble, German finance minister, and Luis de Guindos, Spanish economy minister, condemned the high interest rates demanded for the sale of Spanish bonds as failing to reflect “the fundamentals of the Spanish economy, its growth potential and the sustainability of its public debt”.

Mr de Guindos flew to Berlin for the talks with the German finance minister as Miguel Angel Fernandez Ordonez, former governor of the Spanish central bank, launched a fierce criticism of his government in the Spanish parliament.

“In the first half of the year we have witnessed a collapse in confidence in Spain and its financial system to levels unimaginable seven months ago,” he said. “Now we are not only worse than Italy, but worse than Ireland, a country that has been rescued.”

Or, as Shakespeare had it:

though this be madness, yet there’s method in it.

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