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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Theresa May's fight against burning injustice can start with the UN's anti-austerity treaty

The UK urgently needs to make sure social rights are protected. 

Fifty years ago this month the United Nations presciently adopted a treaty creating legal safety nets for vulnerable communities facing the effects of austerity in wealthier democracies. 

Although this treaty applies to all countries, rich and poor, in prosperity or austerity, this anniversary provides a timely reminder that the treaty has much to offer both those who are just managing and those who are unable to manage.

Admittedly the treaty's title does not trip easily off the tongue - it is called the International Covenant on Economic, Social and Cultural Rights. However, with protests against globalization expressed in the UK with Brexit, in America with Donald Trump and most recently in Italy and France, the Covenant, although international, places limits on globalisation, because it places vulnerability and community at its centre. 

The rights protected by the Covenant include the right to payment for work at a level which provides a "decent living for themselves and their families", the right of everyone to adequate food and housing and the right to the "continuous improvement of living conditions". There are also provisions, which oblige the government to make higher education progressively free, and a right to the highest attainment of health. 

The International Covenant is legally binding on the United Kingdom but the Covenant has been deprioritised by successive governments of all political persuasions. This is for a number of reasons, including a lack of knowledge about courts around the world which have dealt with these rights. 

Successive British governments have assumed that social justice rights are incapable of being protected by courts. In fact, this stems from a failure to look at how an increasing number of modern democracies, including most of Latin America, South Africa and some European states, effectively protect rights such as the highest standard of health and adequate housing. 

Many modern democracies regard social justice rights as reinforcing democracy and an essential component of the rule of law. It is no coincidence that this failure to keep up with social justice developments overseas has left those vulnerable and socially immobile without a legal remedy. 

Many of the rights in a sister Covenant, the International Covenant on Civil and Political Rights, are now reflected in UK law, such as the right to freedom of expression and belief. But there is, despite the NHS, no right to the highest attainable standard of health. This prompts the question: Why have the Prime Minister, the Labour and Liberal parties not called for the Covenant’s rights to be brought back home? This question is particularly pertinent now as the Prime Minister in her inaugural speech stated that her goal was to fight "against the burning injustice that if you are born poor, you will die on average nine years earlier than others".

The only attention paid by governments has been to report as required by the Covenant on how the UK has implemented the treaty, and then to consider the recommendations of the United Nations Committee overseeing the Covenant. This, however, does not provide a remedy for those receiving the half a million emergency food parcels that the Trussell Trust said that it distributed between April and September. 

Strategically, the UK needs to adopt a two-pronged policy. The first step is a simple and free international remedy, which 22 countries allow their citizens to use. The UK ought to ratify the International Protocol to the Covenant, which allows people to petition the UN Committee. As the system does not involve costs, there is no need for the government to provide legal aid. The advantage of this first step is that it would allow a decision to be reached as to whether for example, the UK government is fulfilling its duty to provide adequate nutrition to specific individuals by relying to such an extent on food banks.

Secondly, as Brexit means removing those in the UK from the protection of the EU’s Charter of Fundamental Rights and Freedoms, which enshrines some social justice rights, the UK urgently needs to ensure that social rights are protected. The EU Charter of Fundamental Rights expressly protects human dignity, which it states is inviolable and which, as a specific right, is not found in the Human Rights Act or the European Convention on Human Rights.  The Charter also protects European dimensions of the rights of older people to live a life of dignity and independence, and a right of access to preventive health care, both of which are essential. It is not clear from the government’s Brexit plans so far that these rights will be continued.  A Bill of Rights, which is Human Rights Act Plus, however, would provide such an opportunity.

It may be tempting to argue that this is not the time to consider additional rights, and that rather than seek to expand human rights protection, all energies should be harnessed to defend the Human Rights Act. However, although the rights in the Human Rights Act are constitutionally essential, it was never designed to guard against social immobility or the wealth gap. The raison d’etre of human rights is that all rights are indivisible and equal and the truth is despite the despite the Act being called ‘human rights’, many essential human rights are missing. After fifty years it is time for the UK to reassess the potential of the International Covenant.

Professor Geraldine Van Bueren QC is Professor of International Human Rights Law, Queen Mary, London and Visiting Fellow of Kellogg College, Oxford.