Global markets are doing great on Monday morning after Spain agreed to a 100 billion euro bailout package, but it may only be a temporary oasis before reaching Europe's next crisis point. The exact details of the Spanish rescue plan still haven't been worked out — including whether it should actually be called a "rescue" — but the EU agreement to fund around $125 billion in loans to Spanish banks has eased fears of an imminent collapse of the fourth largest economy in the eurozone.
Spain was originally going to wait until stress tests were done on the banks later this month before deciding exactly how much to ask for, but ultimately decided to quell the nervousness around the region by agreeing to the package now and working out how much money each bank will get later.
However, some are already questioning whether the Spanish bailout (or "Spailout") will be enough to actually solve the underlying problem, as the loans will be channeled through the government, adding even more money to the country's debt. Nobel-prize winner Joseph Stiglitz resurrected the old phrase "voodoo economics" to describe the new plan, complaining that it's just another temporary band-aid that won't cure the disease. Still, all the major indices are up sharply today, including Spain's own stock market.
Now all eyes are now back on Greece, where next Sunday's election becomes the next milesone for the continent. If the anti-bailout Syriza party manages to take control of the government, or if the leading New Democracy party still can't form a coalition that could lead to a total rejection of the euro and the country's exit from the shared currency. No one really wants to think about the (largely unknown) consequences of that decision, but it could become a very real possibility very soon. Even if Greece does remain in the eurozone, there is still a hard road ahead for everyone. After getting bullied by Spain this weekend, it seems that Germany isn't really calling the shots anymore and Chancellor Angel Merkel is even hinting at a real political and fiscal union, where "Europe" has control of each country's finances, not the other way around.
This article is from the archive of our partner The Wire.