While Spanish prime minister Zapatero has been kneeling in prayer in Washington, it seems that his country is undergoing what could be called a Soros moment. This is in memory of the infamous speculative attack launched years ago on the UK pound by the financier George Soros. Obviously there is a key difference, Spain doesn't have a currency of its own to be attacked, but the pressures from the international financial markets are definitely there. It's clear in this case given the statements coming out of Brussels and other international bodies that the target is not just the now infamous "structural reforms" to the labour market, it's public welfare services. Greece has been given the full list for wielding the axe, which doesn't just include pensions, health services are also there.
In the case of Spain the government's proposal to cut back pensions has already received warm approval from these bodies, even though the issue has little or nothing to do with the crisis - I shall return to this in more detail in another post. It's beginning to look like the wave will go from country to country and the solutions being offered in all cases will be massive cutbacks in public services. Welcome to the crisis double whammy, countries go deep into debt because of a crisis largely provoked by the financial markets. The price of rescuing financial institutions is to have them come chasing after each country in turn to pay the bill. We'd already got used to the idea that there was going to be no word of thanks for such massive assistance, I think next time around the case for taking the toys out of the hands of the boys who don't know how to use them responsibly is going to be unanswerable.