European Tribune - Irish pushback strategy - we get mail

First, on the subject of publishing the results of stress tests, it is my impression that this is mainly an option for Spain. Spain is large enough (and has large enough sovereign and interbank debts to the banks of major creditor nations) that the domestic Spanish bank stress tests should have given them a reasonable basis for guessing the solvency (or not) of the banks of major creditor nations. Ireland may or may not represent a large enough part of their balance sheets that you can pull the same trick. But it's certainly worth looking into. If you decide to pursue that strategy, my advice would be to gang up with as many of the other €-zone debtor nations as possible, to get the most complete picture you can (and to avoid being the only country to incur the wrath of the powers that be when you stick it to Frankfurt and the City).

Unfortunately, Zapatero now thinks he's best friends with Merkel. When the next round of attacks gets underway he won't know what hit him.

Merkel: "Spain has done its homework and is on a good path" · ELPAÍS.com in English

The plan, which has been negotiated with French president Nicolas Sarkozy, includes measures already adopted by Spain such as the pushing back of the retirement age to 67, as well as new proposals such as the disassociation of salary increases from inflation, and a legal or even constitutional ban on incurring a budget deficit, as has already been applied in Germany.

Zapatero, who has given his support to Merkel's project, said the euro occupied a large proportion of this morning's bilateral discussions. "The euro zone is [Europe's] most ambitious political and economic project," affirmed the Spanish prime minister. "The euro is strong but we are going to strengthen the common currency even more."

Spain's labor leaders, meanwhile, took no time in rejecting Chancellor Merkel's proposal that salaries should be linked to the growth of benefits and not to inflation. In a joint press conference with the president of Germany's principal labor union, DGB, CCOO leader Ignacio Fernández Toxo and the UGT's Cándido Méndez explained it would be an error if Spanish salaries stopped being linked to the consumer price index and were only linked to productivity.

Keynesianism is intellectually hard, as evidenced by the inability of many trained economists to get it - Paul Krugman