MPs have been amusing themselves with a rather grim game in which they guess what event will lead to Parliament being recalled in August. Over the last few days, the Euro crisis has become the definite favourite. The yield on Spanish bonds is now over 7.55 per cent – a rate that is unaffordable in anything other than the shortest of terms – the IMF is indicating it will cut off future aid to Greece, and Italy’s regional debts are about to pull back into the eye of the storm.
Now, this crisis has so far being marked by a willingness by the Eurozone to do just enough to stave off the trouble for another day. But that is becoming increasingly difficult as the markets begin to ask where the actual money is in all these supposed rescue packages.
The terror of a Greek exit, as various German politicians were stressing over the weekend, might have diminished. But Spain and Italy are very different cases. They are far larger economies, too big to save, as the saying has it.Tags: Euro-crisis