Blog Post

You say Rettung, I say imposición

A summary of the Spanish and German perspectives on the #Spailout. 

By: and Date: July 27, 2012 Topic: European Macroeconomics & Governance

“Germany saves Spain’s banks” reads the headline of a Welt article published on the July 20. When the bailout was announced 10 days before, El País offered a slightly different view when it wrote that eurozone countries “impose an intervention on the Spanish economy”. As the German parliament agreed to the bailout, the Spanish newspaper fears that “the country will carry the burden of a 100,000 million Euros bill for more than a decade”. 

But at least, public opinion in both countries agree on one thing: while 70% of respondents in an El País poll stated that a rescue package was “bad or very bad” for Spain’s future, 52% of the Germans polled by Infratest-dimap for the morning show ARD Morgenmagazin disagreed with the Spanish bailout.

The blame for the difficulties the countries are facing is seldom found at home. As Germany received the first minor blow to its safe haven status in the form of a negative sovereign rating outlook by Moody’s, Bild asks: “Is Europe pulling Germany into the abyss”?. Meanwhile, in an interview with El País, former Spanish Prime Minister Felipe González argued that the bailout is the result of failed policies on the European level. That is, did Europe pull Spain into the abyss? According to him, there is a “shared responsibility” for a monetary policy that facilitated the previous boom.

As for the solutions, Die Welt argues that Germany is already exhausting the political limits of its support for Europe. The broad parliamentary majority for the Spanish bailout stands in stark contrast to German public opinion. With the elections approaching, the uncomplicated oppositional support currently enjoyed by Merkel could come to an end. Spain, turn, also sees its domestic political limits.

A commentary in the Frankfurter Allgemeine Zeitung (FAZ) criticizes Rajoy for hesitating for too long to fight the country’s banking problems. It condemns Rajoy’s teaming up with Monti to press for the bailout while avoiding the typical conditionality attached to European assistance. In turn, El Economista is also sceptical about Rajoy’s bailout plan and asks whether the message launched by the Monti-Rajoy alliance might have been the wrong one. “Did anyone in Rome or Madrid really believe that a direct capitalization of the banks and the massive buying of national debt from the ECB will solve our structural problems?”

An editorial in El País offers a more positive verdict on the rescue package, stating that “Europe can believe again”. “The move [of passing the bailout] is doubly Europeanist. First, Spain gets the necessary resources to recapitalize its finance system.  But at the same time, Europe rescues itself showing a clear support for the euro. (…) Without yesterday’s brave decision, Spanish banks and the country itself would have gone bankrupt, but moreover, the single currency would have been condemned to disappear.”


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