It’s the euro, stupid

Sceptical about the Greek bailout, the markets are rounding on the Spanish and Italian sovereign debts. For the Spanish press, the fault lies with those Europeans elites incapable of defending the single currency with a community response.

Published on 12 July 2011 at 14:40

“Free fall”, leads El Periódico, reporting on the shudders sweeping through the Spanish and Italian stock exchanges shaken by the attacks against both countries’ debts.“Yesterday Spain and Italy began to take a ride on the roller-coaster of sovereign debt that was steeper than ever before,” adds the Barcelona daily.

Yet Spain had “done its homework” in terms of budget deficit and structural reforms. For El Periodico, the problem is, above all, “the fragility of the EU institutions and the dilapidated nationalism of its leaders, headed by Angela Merkel,” and their “resounding inability to put defending the common currency before their national interests.In other words,” writes Enric Hernández, the editor of the daily: “It’s the euro, stupid!”

A matter of survival

For El País, “an unbearable situation in the short-term” is looming up “for the credit-worthiness of Spain, and especially of Italy... In Spain, the explosion in the interest rate on the debt is stifling any recovery” of the economy. The daily emphasises “the gross mismanagement of the crisis” owing to “the absence of a European economic government capable of making decisions,” an absence that “has sown disorder in European finances, derailed the adjustment programmes of several countries, and that could even bring about the demise of the euro.”

For El País, “it is now a matter of survival [of the single currency]: the entire constellation of institutions must agree, painful though it be, to salvage the euro – and they cannot wait for a new rescue plan for Greece."

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Trichet is right

While La Vanguardia notes that “the Italians are now living through what the Spaniards have been living through for a year and are wondering incredulously why the markets doubt the solvency of a country that, until recently, was the “entertainer on the cruise ship the euro was travelling in”, El Mundo stresses the “emergency the European economy finds itself in following the sudden plunge of Italy into the group of countries being punished.”

The sovereign debt crisis has ceased being peripheral and has penetrated to the core of the euro: the third largest economy of the single currency and a member of the G8.... Just how high will the price of the debt to the Treasury get?” asks the paper. “This is the tragedy we’re living through with the crisis: the more things go wrong, the more we are abused by the markets, which are choking our ability to ever get back to health.And all because the European institutions have not engaged in a genuine common economic policy.”

“Trichet is right”, notes El Mundo: “The crisis is teaching us that the only way to get on top of it is through deeper economic integration.”

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