Christmas is no longer cancelled in Dublin, Lisbon and Athens – even Madrid could celebrate
In the austerity wracked eurozone, the cash machine is about to start spewing money. Yes, we've heard the promises of ending the crisis before. But this time, something, at least, is happening.
Christmas is no longer cancelled in Dublin, Lisbon and Athens. Even Madrid could celebrate should its procrastinating PM Mariano Rajoy put his hands out to catch some of the falling euro notes.
Not only has the European Central Bank (ECB) said it will supply unlimited loans to replace debts held in private hands, the German chancellor, Angela Merkel, has joined in.
Why has she changed her mind? Several reasons.
1. The economic situation is getting worse. Austerity is driving the countries worst affected by high debt levels further into recession.
2. Social unrest is tearing at the fabric of Portugal and Greece.
3. Regional separatism is gaining ground in Spain.
4. In Ireland, emigration and a prolonged banking crisis is crippling the economy.
5. And Merkel has established an unassailable position in German public life, allowing her to marginalise hardline MPs and the previously influential Guido Westerwelle, her free market, austerity-loving coalition partner and foreign minister.
Merkel has told the Irish, Greeks, Portugese and Spanish, don't worry what austerity does to your economy and the short-term hit to growth. Keep with the programme and you'll get all the money/loans you need.
In the last couple of days Antonis Samaras, the Greek PM, has assured his own MPs that the money promised for November by the country's lending "troika" – the EU, the International Monetary Fund and the ECB – will arrive on time.
It's just as well, given that the Greek finance ministry reported on Monday that its annual deficit is rising again and the overall debt pile jumped. The prospect of restricting the mountain of loans to 120% of GDP by 2020 now looks fanciful.
Enda Kenny has likewise told his parliament that Merkel agrees Ireland is a special case. And consequently, desperately needed funds for the banking sector will find their way from ECB headquarters in Brussels and Frankfurt to Dublin, probably never to return, except in some de-valued form in 50 years.
Spain was nervous about asking for a bailout in case Germany inflicted all manner of extra austerity measures on its weak economy. A recession this year and next is already in prospect so deeper cuts would be particularly unwelcome.
The nerves are still jangling in Madrid, as an effective vote for independence in the Basque country looks like being replicated next month in the more politically significant region of Catalonia.
Yet Rajoy, like the other leaders, has had all the reassurances he needs that he will need only to pursue existing spending cuts to open Brussels' fighting fund.
So can this policy become a platform for lasting prosperity? Unfortunately, the omens are not good.
Merkel is also demanding closer regulatory and fiscal ties as a price for the loans, which is throwing up all kinds of problems. Not least that some aspects of regulation cover the 27 members of the EU, while others only affect the eurozone 17.
Yet even if there is a way to gain the agreement of Britain and Sweden to rules made largely for the eurozone, there is still the issue of social unrest.
It seems implausible that leaders in the peripheral countries can mask their financial problems with more and bigger loans from Brussels and the ECB. With an exchange rate dictated by the German economy, these countries face years struggling to export their way out of recession. Their main problem is that the debts left over from the crisis are too big. Without debt forgiveness in some form, the Merkel sticking plaster will peel away while the wound remains unhealed.
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