Courtesy of Mish.
In the too stupid to make up category, Rajoy defends ‘victory’ for EU credibility
Mariano Rajoy, the embattled Spanish prime minister, has defended the eurozone’s €100bn bailout for Spanish banks as a victory for European credibility.
He repeated Spanish assertions that the EU aid was different from the full bailout programmes previously provided to Greece, Ireland and Portugal by the EU and the International Monetary Fund, which involved detailed austerity targets and monitoring.
“There’s no conditionality of any kind. This does not affect the deficit,” Mr Rajoy said, placing the new loan deal in the context of his centre-right government’s efforts to restructure the banking system, cut the budget deficit and reform the labour market since it took power less than six months ago.
Economists and analysts say the EU loan nevertheless amounts to a rescue for Spain because the money will go to the state Fund for Orderly Bank Restructuring and was necessary only because Spain itself could not access the sovereign bond markets at a reasonable price.
An opinion poll published on Sunday in the newspaper El País showed that 78 per cent of Spaniards had “little or no” confidence in Mr Rajoy, whose Popular party won an overwhelming election victory over the Socialists in November.
Victory or Defeat?
If a 100 billion euro bailout is a “victory” then what constitutes defeat?
The answer of course is a restructuring or default.
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