Although Spain's Prime Minister Mariano Rajoy and the Troika killers refuse to admit it, the impossibility of bailing out Spain and its banks under the current system and current policies, no matter how fast the printing presses print, provoked renewed talk of trashing the euro in Britain. On Sept. 27, Britain's Daily Telegraph posted not one, but two columns with the message that "Spain Must Leave the Euro," as DT Assistant Editor Jeremy Warner titled his column, which was not missed by nervous Spanish media.
The Eurozone crisis is back in full, with Spain the epicenter where political and economic developments are "threatening to combine into an uncontrollable firestorm," Warner wrote. He pronounced Rajoy "already fatally wounded... a dead man walking.... Spain is chasing its tail into austerity-induced fiscal and economic meltdown. There is only one conclusion to be drawn from all this; though the short-term costs would be profound, Spain must leave the single currency. Spain is damned if it leaves, but damned for eternity if it stays. Eurozone policy as it stands offers no plausible way back to prosperity."
Warner is right on the latter point, but leaving the euro and monetarism generally, if combined with Glass-Steagall bank separation and a credit system, would pull Spain rapidly out of hell.
Writing in the same edition of the paper, DT columnist Daniel Hannan, a Conservative MEP, warned that under current policies, parliamentary politics itself are at risk in Spain. "The trouble is that, while Spaniards recognize the folly of imposing cuts while at the same time bailing out banks, they shy away from the logical conclusion: that leaving the euro is now the least bad option. The real threat to Spanish democracy is not internal but external; not a pronunciamiento but a Brussels-imposed civilian junta, as happened in Italy. Mario Monti, the EU's proconsul in Rome, indicated yesterday that he might seek a second term. (Oddly, I don't remember him seeking the first.)