French press review 24 July 2012

Spain is the new Greece.

We should have seen it coming. Yesterday, we had Mario Draghi, the head honcho at the European Central Bank, saying that the eurozone was responding well to the austerity diet of hot air and empty promises, and that the future of the single currency was assured.

Famous last words.

This morning, the main headlines in both Le Figaro and Les Echos are screaming cries of alarm.

"Spain takes another plunge, Europe trembles" says Le Figaro, proving that you should never let a mixed metaphor get in the way of a striking headline.

"Wind of panic blows across world markets" is Les Echos' meteorological take on events, with the wind building up to a storm by the time you get to the small print.

The problem is that Spain, despite a series of budget cuts that threaten the general population with starvation, is still having to borrow money at cut-throat rates just to pay the rent and the gas bill.

Dossier: Eurozone in crisis

Already the vultures are circling the Italian economy, and the ratings agencies have warned that even the mighty German economy, powerhouse of Europe, standard-bearer in the battle against spendthrift Greeks, Italians, Irish and other disreputable members of the European fringe, even Germany might have to have its credit rating reviewed.

The markets seem to believe that the size and complexity of the Spanish problem, with several regions already bankrupt and begging funds from a central bank which couldn't buy a postage stamp, may, finally, be sufficient to expose the fundamental flaw in the European monetary experiment.

That is, that you can only have a football match if everyone agrees to accept the referee's decisions. Team Europe currently can't even agree on the name of the game, so it's not too surprising that so many red cards have been dished out.

Communist L'Humanité says that what Europe needs is a publicly-owned European bank which will loan money directly to struggling states, thus saving them from the stranglehold of austerity plans. Where the money to finance such an initiative will come from remains a bit of a mystery.

Perhaps the speculators who have made gazillions of euros profiting from the crisis could be asked to cough up a few cents to save the Old Continent from ruin?