More Hardball

Noting the similarity between the aforementioned in February BBVA and Santander beggar-thy-neighbour strategy of voluntary taking big writedowns on debt-for-equity properties in their portfolios and the German government's recently announced fiscal austerity program, we are pleased to also observe that the Spanish government has, for once, come out swinging in its own defense. The recent announcement that the BE would conduct, and publish the results of, stress tests on Spanish banks - with or without a similar commitment from Germany and France - marks a milestone in this country's relationship with its neighbours.

The fact is that Spain has always thought it more or less unnecessary to be a protagonist in European affairs. After all, the nation's self-image as a paradise on earth to which people, come they in airplanes from Stanstead or in rowboats across the Straits of Gibraltar, are hypnotically attracted precluded even the most rudimentary concessions to the rest of the world (such as a president that could speak English). The end result of this has been a country that receives so little respect on the international scene that, despite the size of its economy, its chief politician can only get into G-20 blabfests by sitting on Nicholas Sarkozy's knee.

This serious attitudinal encumbrance when it comes to dealing with blood-seeking global financial markets and international media appears to have been cast aside for the moment - with instant results. Germany, despite the generally held opinion that its financial institutions will likely come out looking pretty grim from the process, has reluctantly agreed to participate. Spain's banks will likely emerge looking comparatively healthy. That it came from the mouth of President Zapatero should not, however, make him elegible for any prize. He couldn't come up with this plan in six lifetimes.

On a peripherally related front, our attention was siezed by this morning's 'Further Reading' entry at FT Alphaville. Pointing to an item at the widely respected Econbrowser, it irritatedly reads:

- For the 100th time, is Spain next – or not?

Such a shame. To paraphrase Mssr. Johnson - when a man is tired of PIGS, he is tired of life.

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