Euro Area

[SoFarSoGood]

The Germans (with the Dutch and Finns) have apparently backed down on the deal for the ESM to refinance Spanish banks. This means Spain has to find another 60 - 100 bn euros itself. Spanish 10 year bonds at 6.01100.

[gaelic cowboy]

The Germans (with the Dutch and Finns) have apparently backed down on the deal for the ESM to refinance Spanish banks. This means Spain has to find another 60 - 100 bn euros itself. Spanish 10 year bonds at 6.01100.

These nonsensical comments by the finance ministers put all the potential good work from the lowering of of bond prices since June at extreme risk.

I have no proof but the only reason anyone would do this is essentially I believe to frighten Italy, they must believe they can just about bail Spain out.

There comments reveal a paradoxical problem for lowering bond prices, the market lowered prices due to the expected gain from the ESM bailing banks separate from sovereigns. The germans then point at the lower prices and proclaim the austerity confidence fairy in working, so the row back on capital injections and therefore endanger the Euro itself.

Ireland if it does not get the legacy issue sorted with bank debt through the ESm like Spain will require a second bailout, the germans will proclaim we slacked off when in fact we have met every condition they put us and still the shamrock wont grow.

[Philippus Flavius Homovallumus]

German finance ministers have a history of stupid comments like this though - I am beginning to suspect it's merely a question of hubris and a sense of invulnerability.

[gaelic cowboy]

German finance ministers have a history of stupid comments like this though - I am beginning to suspect it's merely a question of hubris and a sense of invulnerability.

Ther bricking it because by not grasping the nettle 4 year ago they have brought recession to germany, but there gonna keep the myth going till after the german election

[Philippus Flavius Homovallumus]

Ther bricking it because by not grasping the nettle 4 year ago they have brought recession to germany, but there gonna keep the myth going till after the german election

The problem is - German politics mitigates against strong leaders. That's mostly fine, Germany is so big and powerful that mostly a weak leader can steer the ship; but now Germany needs a strong leader who can galvanise the population and convince them that if they don't support Europe nobody else can.

[SoFarSoGood]

These nonsensical comments by the finance ministers put all the potential good work from the lowering of of bond prices since June at extreme risk.

I have no proof but the only reason anyone would do this is essentially I believe to frighten Italy, they must believe they can just about bail Spain out.

There comments reveal a paradoxical problem for lowering bond prices, the market lowered prices due to the expected gain from the ESM bailing banks separate from sovereigns. The germans then point at the lower prices and proclaim the austerity confidence fairy in working, so the row back on capital injections and therefore endanger the Euro itself.

Ireland if it does not get the legacy issue sorted with bank debt through the ESm like Spain will require a second bailout, the germans will proclaim we slacked off when in fact we have met every condition they put us and still the shamrock wont grow.

The thing is that because Spain has to ask for help before ECB help can be given it has to literaly get worse before it can get better... They have created a shorting dream. Within days everyone will be short selling Spanish bonds.

Of course if they (Spain) formaly apply for help they get 'troika'd' and this includes control of the regions. So the 'Catalonia problem' gets worse. Rajoy's answer seems to be 40bn euros of cuts in this afternoons 'emergency budget' (new tax on the national lottery an 8.9pc cut in the budget for government ministries etc). They are now in the same cut and die vicious circle as Greece but at heightened risk to 'Catalan problem'.