Thursday, July 12, 2012

Rajoy 4 - Spain 0.

Or, El Gran Ajuste

How short-lived were everybody's already meagre hopes, after the latest Euro Summit. So, contrary to the urban legend originated in La Moncloa, the bailout given to the Spanish private banks did come with strings attached after all...

And what strings! For a change, the strings, which look more like a noose, go around the necks of the Spanish people.

In some eight months in Government, Mariano Rajoy has broken pretty much each and every single election campaign promise: from fiscal fraud amnesty (which they promised not to adopt, but did adopt) down to the increase in value added tax (which they said would not increase, but will now, from 18% to 21%). Altogether, a deficit cut of EUR65 bn in two years, in addition to the already decreed cut of EUR27 bn, announced last April.

When Rajoy's "People's" Party decided to pass the fiscal fraud amnesty, they bypassed Parliament, even though they had decisive majority and did not need any discussion. Thus, the infamous executive decree came into being.

Now, in what some would call a surprising turn around, the "People's" Party is all for parliamentary consensus. If I were cynical, which I am not, I'd say shit shared stinks less.

But the PP guys surely can spin things differently. Say, Mariano Rajoy agonized before taking such a decision and:
" ' He needs our care and support, because these aren't easy days for him', said PP parliamentarians, who also said they share Rajoy's feelings, having to approve hard measures, in which he doesn't believe or like." (See here. My translation from the original in Spanish)
Now, Spanish readers, just wait, because soon enough the same international slander campaign directed against the Greeks will be directed against you: it is Rajoy who deserves solidarity, after all. Mark my words.

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But that's not all: Germany's Constitutional Court in Karlsruhe still has to rule on the ESM. Will they approve it?

Speaking dispassionately, it's an important decision and they need time to consider all aspects, as Der Spiegel convincingly argues: "Most German media commentators writing in Wednesday's newspapers say the court is right not to let the government and financial markets badger it into taking a swift decision".

Fair enough. However, I can't help noticing this calm when it comes to Germany's Constitutional Court has no parallel with the pressure applied over the Greek voters in the latest election.

Particularly given the consequences of a negative decision, which are described by Berliner Zeitung, cited by Der Spiegel, in terms similar to those used to describe a potential Greek attempt at renegotiating their debt:
"If the Germans were now to be prevented by their constitutional court from doing so [transferring funds to the ESM], Europe would face an economic disaster that would engulf even the biggest euro member country. The support is therefore in the national interest and is well justified beyond any altruistic considerations."

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