Insurmountable.And in this case neither the banks nor anyone else are winning. On the contrary, there are myriad losers.
Above all, the Eurozone project that was built up over the course of several decades in order to unite the Old Continent with a common currency and leave behind a dark history of warring neighbours.
Yesterday, the dangerous game being played by political, economic and monetary leaders from the Eurozone, IMF and G-20 was expanded further to affect Spain, a country that is less and less the master of its own destiny.
With a risk premium (the extra interest that investors demand for holding Spanish 10-year notes instead of comparable German bonds) is riding above 450 basis points for the first time since the 1990s.
With yields on 10-year notes at 6.33% and a National Treasury that paid more than 5% interest on 12 and 18-month bonds as of yesterday, Spain is starting to be at the mercy of world events.
Said in another way, reforms and policy measures are not enough to restore confidence in debt and economic strength in Spain. But the EU, the ECB, the IMF and the G-20 should intervene to throw a life line to Spain, as it did with Italy last week.
The ECB will start things off
In the near term, the European Central Bank (ECB) is hoarding all the attention. Pragmatically, it is the only social agent that can pull off a recovery.
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