Spain's bank balance starts heading in the right direction

Some good news from Europe.

This chart, from JP Morgan via FT Alphaville's David Keohane, is quietly rather good news:

 

TARGET2 (Trans-European Automated Real-Time Gross Settlement System – yes, it's not a particularly good acronym) is the European inter-bank lending system, used for settling cross-border transactions throughout the eurozone.

If a Spanish supermarket buys beer from a German brewer and pays with a bank transfer, then the euros aren't just sent directly from one account to the other. Instead, they are channeled through the countries' central banks. The German brewer gets money from their bank, which gets the money from the Bundesbank, while the Spanish supermarket owes money to their local bank, which owes money to the Banco de España. The two central banks then settle those debts with the ECB, and that's the where TARGET2 comes in. Over the long-term, these debts and credits don't always even out, and so countries end up with balances with the ECB.

The chart above shows that the long-running trend for Germany to have ever-increasing credit, and Spain ever-increasing debt, may now be reversing. This is a good thing, because one of the few silver-linings of the crippling austerity the Spanish people have experienced over the last year is that the so-called "internal devaluation" – the reduction of wages in the country – is supposed to increase the strength of exports.

The TARGET2 trend also indicates that fears of a Spanish bank run are unfounded. While it doesn't leave the country in the all-clear – if people are taking money from banks in cash, it wouldn't show up on this account – it bodes well for the health of the banking sector.

But the most important aspect of TARGET2 for the eurocrisis as a whole is that it provides a mechanism for mechanical exit of the euro. We wrote about this in May with regards to Greece, but the short version is that if the debt gets too big, the ECB can decide to simply stop lending to the country. If that happens, the state is all but ejected from the euro in a stroke.

Greece may not be out of the water yet, but the knowledge that Spain is, for the time being, perfectly safe in the eurozone will help the country get its bearing. It still leaves Rajoy with the tough decision as to whether or not to officially request a bailout, but his hand is no longer as forced as it was.

Symbolic. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Battle of the banners: how the disputes of football took to the skies

Across the top of the screen floated a banner, pulled by a little aeroplane: IN ARSENE WE TRUST.

Last weekend, during the West Brom-Arsenal game, I began to think my hearing was playing up again. I’ve been given hearing aids but don’t wear them. No, not vanity, it’s just a faff to put the things in and the quality of my life, which is excellent, is not being impaired. Anyway, as I live on my own, if the sound on the telly is too low, I put it up. No one knows or cares.

When I’m out entertaining lady friends at my local bistro, I always get a quiet table in the corner and sit facing them, all rapt attention, totally focused on them, so they think. It’s really just to help my hearing.

On the TV screen, I suddenly heard an aeroplane, which was weird, as there was no sign of it, but then hearing problems are weird. Children talking sounds deafening. Some consonants disappear. Could it be a helicopter on the Heath, taking some injured person to the Royal Free? At our Lakeland house, I often heard helicopters: the mountain rescue team, picking up someone who had collapsed on Grasmoor. So I do know what they sound like. But this sounded like Biggles.

Then across the top of the screen floated a banner, pulled by a little aeroplane: IN ARSENE WE TRUST. The score at the time was 1-1, Arsenal having just equalised. They eventually got beaten 3-1. Oh, the shame and irony.

Apparently, earlier in the game, according to newspaper reports the next day, there had been an anti-Wenger aeroplane banner: NO CONTRACT, WENGER OUT. I didn’t see it – or Sky TV didn’t show it.

Where do the fans or supporter groups get all the money? And how do they organise it? There is a theory that IN ARSENE WE TRUST was paid for by Arsène himself. Another, more amusing theory is that it was a group of Spurs supporters, desperate for Arsène to stay on at Arsenal and continue getting stuffed.

There have been a few similar aeroplane banners at football matches in recent years. There was one at Newcastle, when they were playing Sunderland, which read 5 IN A ROW 5UNDERLAND. Sunderland won, so it came true. Sent the Geordie fans potty.

Everton fans flew one in 2015 which read KENWRIGHT & CO TIME TO GO. He is still chairman, so it didn’t work.

Millwall fans did an awfully complicated one in 2011 at Wigan, during the Wigan-West Ham game, which resulted in West Ham going down. They hired a plane to fly overhead with the banner AVRAM GRANT – MILLWALL LEGEND. Now you have to know that Grant was the West Ham manager and Millwall are their rivals. And that they couldn’t fly it at West Ham itself, which could have caused most fury to West Ham fans. There’s a no-fly zone in London, which stops rival fans hiring planes to take the piss out of Chelsea, Arsenal and West Ham. The Millwall supporters who organised it later revealed that it had only cost them £650. Quite cheap, for a good laugh.

There’s presumably some light aeroplane firm that specialises in flying banners over football grounds.

I do remember a few years ago, at White Hart Lane and Highbury, walking to the grounds and looking out for blimps flying overhead – small, balloon-like airships mainly used for promotional purposes, such as Goodyear tyres or Sky’s aerial camera. The results were pretty useless, showing little. I haven’t seen any recently, so presumably blimps aren’t allowed over central London either.

I am surprised drones have not been used, illegally, of course, to display obscene messages during games. They could drag a few pithy words while on the way to drop drugs at Pentonville Prison.

The history of aeroplane advertising goes back a long way. Before the Second World War, Littlewoods and Vernons football pools were fighting it out for dominance, just as the online betting firms are doing today. In 1935, Littlewoods sent planes over London pulling banners that proclaimed LITTLEWOODS ABOVE ALL. Jolly witty, huh. 

Hunter Davies is a journalist, broadcaster and profilic author perhaps best known for writing about the Beatles. He is an ardent Tottenham fan and writes a regular column on football for the New Statesman.

This article first appeared in the 23 March 2017 issue of the New Statesman, Trump's permanent revolution