Spanish Prime Minister Mariano Rajoy is Commander In Chief of the European Union’s biggest army. Not in a military sense, but on the social front as he is the sad leader of the biggest army of unemployed in the EU. His socialist predecessor extended assistance to the long-term unemployed for three years which expired today. In order to avoid social unrest he vowed to extend payments to the long-term unemployed for an additional six months.
Rajoy may have averted social unrest and riots for the time being, but at the same time he pissed of his life support as EU policy makers are very upset over this move. Rajoy enjoys rabidly declining support at home and now pissed on the wrong trees in the global arena. Spanish bond yields hover comfortably above the 7% level which is very uncomfortable for Spain as it struggles on just about every front it can and makes a full bailout of the country an unavoidable event right around the corner.
Rajoy mentioned that he may ask for financial assistance from the EU and had no plans on how to repay such support. There is a saying that goes: ‘Don’t bite the hand that’s feeding you.’ Rajoy did just that and provoked the ECB and Northern Europe in general as they will be even less willing to provide assistance. This comes after ECB President Mario Draghi announced the ECB would do everything necessary in order to ensure the Euro would whether the storm. Severe retardation led to the hope of a Euro bond before the month ends and pushed the Euro higher before those brain amputated traders realized that it is more talk and less walk.
Sovereign members do like to have sexual intercourse with the ECB. Italy pledged heavy budget cuts and the ECB was the little female canine which took the bait, purchased Italian bonds and spread her legs wide open to welcome the intense coitus Italy showed its appreciation with as budget cuts were wiped off the table and replaced by performers from the adult entertainment industry in order to engage in self-inflicted orgasms due to another successful round of playing with the ECB the way they needed.
The ECB has not forgotten those events and Spain does not even hide its intentions to not adhere to a strict budget and enforce necessary budget cuts. Rajoy did a 180 and will expand social programs while he voiced his desire to tap the ECB for funds as the economy is far beyond struggle. The cost for the six month extension is unknown, go figure, but it cost €642 million for six months in 2009 when the unemployment rate was 18%. The Spanish government pays €400 per individual and currently 200,000 are reported to be on this program. A total of 1.7 million households are left without a single employed individual.
Hail socialism! The two biggest unions in the country already threaten a ‘hot autumn’ and plan to launch nationwide protests in order to force the government down to its needs and bring Spain to a standstill unless social programs wills be extended. Spain was forced to hammer out an additional €65 billion in budget cuts which was the price tag for a one year extension in order to meet budget targets set by the EU.
As part of the heavy budget cuts a reduction in jobless benefits is necessary which unions are not happy over. An increase in the VAT is also expected which is in direct violation of his election promises and will be extremely counterproductive.
