Whitehall sits and waits. Normal politics is continuing, squalls over whether the apprentice stewards at the Jubilee were taken advantage of and the next stage in the Warsi saga have dominated today, but everyone knows that the big story is unfolding — albeit, at an unpredictable pace — on the continent.
There are, at the moment, two big questions. The first is how will Spain, which has essentially admitted that it will struggle to sell any more bonds, recapitalise its banks. Once again, we see the president of the ECB, the Commission and most of the other Eurozone members badgering the Germans to bend the rules and allow a quick fix solution. Again, Merkel is giving ground, but only slowly. The danger is that there might not be time for the German Chancellor to consider her options. If a bank run started, it is hard to see how the European Central Bank could contain the crisis given its present remit.
The second is what happens to Greece. As the New York Times reports today, whoever wins the Greek election is going to need another handout from the troika. Athens has a 1.7 billion euro shortfall in its accounts that won’t be covered even if the troika releases the billion euros it is currently holding onto until the election results are in. Another longer term worry is where the Greek state’s future revenue is going to come from. It brought in a quarter less revenue this May than it did a year ago.