Who wins as Spain stutters?

The news that matters today isn’t what was said at Leveson, it’s becoming increasingly clear that the government won’t act on the inquiry’s report if it suggests anything big, but that the Spanish bailout is failing. Indeed, Spanish bank stocks are lower this evening than they were this morning and the yield on Spain’s 10 year bonds is back above six percent.

But one group who will benefit from the Spanish bailout is Syriza, the Greek anti-bailout party. The decision to bailout Spain without fiscal conditions is a major boost to Syriza’s pitch that ultimately the rest of the Eurozone will blink if Greece demands changes to the terms of its bailout. Syriza’s leader has already seized on it, arguing that, ‘It is difficult to imagine that Europe would prefer to risk a global crisis in the banking system than to help the banks of the countries that need recapitalization.’

Now, they’re no opinion polls in Greece ahead of Sunday’s elections. But reports are that New Democracy was, as of the weekend, narrowly ahead. One would expect, though, that the Spanish deal will boost Syriza making it even more likely that no pro-bailout government will be able to be formed after these second elections.