Strain in Spain

The former Spanish Prime Minister, Felipe Gonzalez, said today "we're in a state of total emergency, the worst crisis we have ever lived through."

Deputy Prime Minister Soraya Saenz de Santamaria defined today's crisis as being about the future of Europe. "If the EU doesn't reinforce the eurozone with some sort of mechanism, it's not about who leaves, it's about the EU itself. What is Europe without the euro?"

Goerge Magnus Investment advisor to USB Banks said on radio this morning "The crisis ... is symptomatic of a deposit flight hitting southern europe..." Referring to the current borrowing rate of the Spanish government he added "7% ; beyond which it is unsustainable for banks to continue to fiance government debt."

All this is after the European Bank spent the Xmas holidays dishing out a trillion (yes - a thousand billion) euros to these very same banks. There is another euro fund being set up, but even if it happens on time, even if all the promises are met (and they have not been yet) it is supposed to total 700 billion euros only. (The IMF - the body that dishes out harsh loans to underdeveloped countries - is trying to make another 300 billion appear out of its promissory notes too.) June looks like a bumpy month in politics and in economics. It would have the fun of a crazy carnival if millions more lives were not about to be blighted.

See you again on June 6 with more news from Spain.  Meanwhile hold onto your hats.