Much of the financial future of Europe is still caught in a web of the political movements of Germany’s Angela Merkel. Today, the possibility that her own party will not support a Spanish bank bailout emerged. And Merkel has not entirely decided on her position of where liability for bank rescues should sit. Her early comments suggested that Spain’s bank problems are Spain’s. That would put more pressure on the troubled nation’s sovereign debt.
One reason Merkel may have taken this stance is that her Christian Democratic Party has not offered full support of the bailout. German politicians also may await an IMF study on Spain’s economy, as well as a decision by Germany’s highest court about whether it is constitutional for the nation to give such aid at all.
Douglas A. McIntyre