Tag Archives: Mariano Rajoy


Guest post. Translated from the French by Tim Gupwell

A united front of German banks has opened up, refusing any kind of interference from a supervisory body – in this case the ECB – due to their little idiosyncrasies and their little hidden frailties, but also the risk of being made to contribute via a European fund to the saving of other countries’ establishments. The savings banks, mutuals and regional banks (Landesbanken) which comprise it represent 70% of the deposits held in Germany.

Talking of deposits, the prospect of a separation of deposit activities from speculative activities has also caused a general outcry, this time from the ranks of the all-purpose (universal) banks. All of them would like to see the deadline for the reinforcement of their capital base, required by the Basel III agreement, put back. It would be impossible to list – with all the open files, including some only just opened, or even quickly closed again – the extent to which the financial establishments are successfully digging in their heels at the rather half-hearted attempts to rein them in, regulate and reinforce them. They want to remain the masters of their own destiny.

Continue reading THE DRAWBRIDGE MENTALITY, by François Leclerc


Guest post. Translated from the French by Tim Gupwell

By rejecting the quartet’s plan, (which has, moreover, already been watered-down) before the summit has even been held, the German deputy foreign affairs minister, Michael Link has placed himself in the avant-garde of all those opposing any attempt at a compromise. The “iron chancellor’s” hard-line approach has not changed: political union first, but not yet, and possibly the rest after that. There is a risk that the only thing left of the elaborate construction, already proposed only in its broadest outlines (even for that of the banking union component) is the transfer of Eurozone banking supervision to the ECB. There remains only one way out: an application of the German strategy which is based on a debt reduction of the public sector in priority.

For the summit Angela Merkel is rejecting all the ‘magic formulas’ and seeking to stick to the “strong message” sent out by the growth plan which was decided in Rome and which was immediately dismissed as insignificant. François Hollande will have to content himself with this to make a good impression. “It’s about finding lasting solutions, not quick and easy ones”, she added. “Structural reforms will be at the top of the agenda”, she proclaimed to the Bundestag, as if there still remained any doubts; even if it means making use of the quartet’s document for her own ends.

Continue reading THE WINDOWS MUST REMAIN CLOSED, by François Leclerc


Guest post. Translated from the French by Tim Gupwell.

It was no longer possible to carry on. Two and a half hours of videoconference between the Eurozone’s finance ministers (joined by Christine Lagarde on behalf of the IMF) were needed to finalize the scheme, allowing the German and Spanish governments to save face. Germany made sure that aid for the Spanish banks passed via the State, thus increasing Spain’s deficit, whilst Spain attempted to explain that this was not a bail-out plan or a loss of sovereignty, with, furthermore, the assistance not being subject to any austerity measures.

Up to a hundred billion Euros are going to be lent to FROB, the government’s banking support fund, on the condition that the government takes measures to stabilize its banking system. How this will work is yet to be defined. The IMF, which is not contributing financially to the rescue, will be entrusted with the task of ensuring it all goes smoothly.

Continue reading A HUNDRED BILLION EUROS FOR SPANISH BANKS, by François Leclerc