Wave of fear

A wave of fear has passed though both of the main classes in Europe as they prepare for the crisis to come. In Greece, after ten days of polls showing a lead for anti-austerity Syriza, the latest published polls (May 16 / 17) have New Democracy inching ahead. The tone of the campaign in Greece is apocalyptic. Samaras, leader of New Democracy described Syriza as a 'harbinger of a nightmare.'

Meanwhile the markets, and their grotesque handmaiden Moody's credit rating agency, have driven down the fortunes of Spanish banks. One result was the withdrawal of £200 million by nervous retail customers from Santanders-UK on Friday. Kent County Council, still suffering frostbite from its previous little adventure in Iceland, stopped placing £3 million of overnight deposits with Santander this week. Meanwhile everybody is trying to reassure everybody else (while making their own moves) as fast as they can.

!6 Spanish banks have been downgraded. The Bank of Spain disclosed on Friday that the value of bad loans held by Spanish banks had increased in the last year to £148 billion.
"The battle for the euro is going to be waged in Spain" Luis de Guindos told the FT (19 May.)

So, the social and political battle in Greece (2% of the EU economy) will be the cockpit of a huge struggle between the classes, certainly on a European scale that will set the direction of travel not only for politics but also for economics across a continent.  If the Greek people can make a stand then the real contagion will spread across to the peoples of Spain, of Italy and more. On the one side the combativity, the bravery and the clarity of 11.3 million people. On the other the power of the super rich, the institutions they run, the media they control and the fear they can create.