This is shaping up to be a rather dismal week for poor Spain – and it’s only Monday. Reports broke this weekend regarding a recommendation, penned by ECB president Mario Draghi himself, that would impose losses on holders of senior bonds issued by the most severely damaged Spanish savings banks. It’s a complete turnaround from the ECB’s 2010 stance, which maintained that normal savers should not have to pay for institutional failure. MT can hear the mumblings from the top dogs in Spain’s banking industry, ‘They were so much nicer to Ireland…’
However, according to the Wall Street Journal, this may end up as little more than a storm in a teacup. Finance ministers are up in arms over the report, saying that such a move could cause severe damage to market confidence. Could, would, and probably will, despite the attempts at damage limitation now.
A further blow to market confidence will be dealt later today by Christine Lagarde, head of the IMF. The economic Sybil has indicated that the organisation intends to lower its global forecast, saying that the updated figure would be ‘tilted to the downside’ compared with its 3.5% global growth projection three months ago. It is expected that Italy and Spain will be cited as the two prime culprits arresting growth. Despite the best efforts of national government and the ECB, fears persist over one or both countries needing an international bailout.
Against this economic backdrop, it is perhaps not so surprising then that the ECB reckons the number of counterfeit euro notes has slipped 15.2% in the first six months of this year, compared with the same period last year.
With the euro falling to 78.55p in early trade this morning - its lowest level since 2008 - the real notes aren't worth much, let alone the fakes. Perhaps dollar and sterling forgeries will rise as a result...