by Andrew Stuttaford

Writing in the Daily Telegraph, Ambrose Evans Pritchard:

. . . It is still unclear what the exact terms of any deal for Club Med states might be. With youth unemployment surging to 54pc in Spain and 35pc in Italy, austerity is already threatening democratic cohesion.  For now markets have accepted that the ECB bond plan unveiled by Mario Draghi on Thursday, has greatly reduced the “tail-risk” of sovereign defaults. Yields on Spanish 10-year bonds have fallen 150 basis points this week, dropping to 5.74pc on Friday.

Mr Aznar, the leading intellectual force of Spain’s ruling Partido Popular, said large parts of the middle class are “disappearing” in the crisis countries while the social welfare pillar of post-War Europe is crumbling before our eyes.

The Spanish statesman said the push for fiscal and political union to hold the euro together is deeply misguided. “It is a very serious mistake to try to destroy the nation states. You cannot go against the cultural beliefs of the people and the forces of history . . . A United States of Europe is an impossible idea.”

It’s also not something that the voters want. But the oligarchs haven’t given up yet. And so the crisis — political and financial – continues.

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