Spanish Bear, or Bull

In another Express article (May 27) the rattling of investor confidence in Spanish banks is linked to similar recent experiences in Italy and Germany.

Low, indeed negative, interest rates are cited as responsible for a rash of selling of bank shares by investors.

What has this to do with the EU? Well, we’re not blaming the EU for causing the banking crisis, which has echoes elsewhere, outside Europe. However, EU mandarins claim that, were it not for ‘divergence’, they could wave a magic policy wand which would solve the crisis.

Does anyone believe them? This is unlikely, as their proposed ‘solutions’ centre on demands that member states and their banks conform to yet more convergence. They offer no convincing arguments to support their claims that more central control will mitigate economic weakness, though divergence does give them the excuse to blame incompetent nations rather than themselves.


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