Euro exit beats begging bowl, says Spanish elder statesman

Thursday, July 26, 2012
By Paul Martin

The regional leader of Asturias in Spain has become the country’s first major figure to call for a radical change of strategy and exit from the euro, unless monetary union is fundamentally reformed.

By Ambrose Evans-Pritchard
TelegraphUK
25 Jul 2012

Francisco Alvarez Cascos, the region’s president and former secretary-general of Spain’s ruling party, accused premier Mariano Rajoy of humiliating the nation by touring Europe with a “begging bowl”.

The attack came as Spanish finance minister Luis de Guindos hopped from Berlin to Paris in a desperate attempt to drum up support as yields on Spanish two-year debt surged to a fresh record of 7pc.

Mr de Guindos hopes to recruit enough allies to force a policy change by the European Central Bank and avert a full sovereign rescue. He angrily denied press reports that Madrid has thrown in the towel and negotiated German backing for a €300bn (£235bn) package from Europe’s rescue fund.

Mr Cascos said the government is “utterly incompetent”, but warned that the deeper crisis is a “perverse” monetary system where capital flight from countries in distress is funding creditor states at zero rates. “This can’t go on for long, or we will have to think about leaving the euro before we are thrown out,” he said.

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