Signs of Spanish fudge?
There’s real and constant anxiety at the Treasury about the Eurozone crisis, but a glimmer of hope that the immediate Spanish borrowing problem can be finessed.
Some wheeze or fudge, it seems, is being worked on that will allow Spain to say it hasn’t been bailed out but for Europe to come to some sort of rescue for Spain’s banks.
That would put the immediate focus back on Greece and how Europe copes with whatever message the Greek electorate sends them on 17th June.
David Cameron’s message when he meets Chancellor Merkel in Berlin tomorrow will be “get on with it,” or words to that effect .. but that has been his message for some time.
Number 10 is emphasising that he will travel to Berlin with President Obama’s backing for his message. But then that’s been true for some time too.
Germany still seems unwilling to go any further than talking about “road-maps” to fiscal and political union and there’s no reason to think that David Cameron’s talks with Angela Merkel will lead to some breakthrough.
There was one bit of movement today, with the Eurozone countries talking of moving towards a banking union.
David Cameron doesn’t want to look like he’s being anything other than enthusiatic about anything that looks like progress so he is cheering on this development.
The Whitehall view is that banking union amongst the Eurozone countries wouldn’t necessarily require a treaty and the line is that it wouldn’t necessarily harm UK interests. There’s suspicion that is based on pretty embryonic (perhaps wishful) thinking.
Even if it doesn’t require a treaty, a Eurozone banking union could require EU unanimity and David Cameron’s party would crawl across its small-print and its impact on the UK. This could become a lot bigger in the continental and British political scenes than it looks right now.
If you want a farily gloomy prognosis for the Eurozone crisis, try this one for size: Multi-dimensional chicken
If you’re ready for a Beachy Head type take on the whole matter, this one might be more for you: The End of the euro – a survivor’s guide