Parole, parole, parole.

Today the ECB president Mario Draghi disappointed the markets (and many more) taking no particular action to ease debt prices for Spain or Italy. Acting surprised, he affirmed that he didn't really mean anything when he stated in London a week ago that he will do “whatever it takes to preserve the euro”. Apparently his words “believe me, it will be enough” are not an indication of any action for now, but just a general promise that we won't go back to the peseta and the lira.

The “whatever it takes”, in fact, has been used again and again in the last two years by Chancellor Merkel and is present in virtually all statements by the European Council. Sometimes they change to "whatever is necessary" and "whatever is required". Those of us who have followed this closely almost laugh about it. But of course in this context, citizens, politicians and investors thought that the EU would know better about empty statements and would start filling those words with more actions, especially the ECB. If you say something, do something.

When the Federal Reserve says something it is aware of the consequences. President Ben Bernanke is particularly fond of predictability. And we know that the Fed is probably going to take some action in September. Because it said yesterday it will act “as needed”. There are roundabout ways here too, but they usually mean something.

In Europe, not necessarily.

The Flemish bubble. Why the bailouts are not working.

Herman Van Rompuy is an old-school Belgian politician. He's Flemish and he has spent most of his career dealing with tiny politics defending the local Dutch (which is different from the language spoken in the Netherlands) and worried about street signs in French, from the other side of segregated Belgium, around Brussels. He writes haikus and lives in a village. 

He is the president of the European Council, a sort of mediator among the 27 EU Member States, but he has surrounded himself basically by other Flemish politicians from the same small world who tend to isolate anyone from the outside and still fight their petty wars. Van Rompuy doesn't like interviews and the few ones he does are usually confined to the tiny Flemish media, where sometimes he says strong words, thinking perhaps that they won't get very far from the six million people in Flanders.

The EU has lived for a long a time as Van Rompuy. As if nobody was watching. So it had (or it thought it had) the luxury of discussing until dawn to reach half-cooked agreements with big words and scarce content. But for the first time everybody is actually watching. And as many of us before, they don't like what they see. Nobel Joseph Stiglitz told me yesterday that “markets are saying something is wrong with the European framework” even if they don't know “exactly what”.

Over a decade ago, the EU tried to cheat by creating a single currency without a real economic, financial or fiscal policy behind it, not to mention a common working culture (although some bad habits as early retirement and apathy are widespread). And now it is surprised that no bailout is working.

The flaws are first of all in each country, and each Government, but also in Brussels. The Spanish bailout is not working, but we see that the three previously 'rescued' countries can't go back to the markets either. If Greece were to do it today, the State would have to offer a 30% interest for its bonds, 12 points or so more than Uganda. Portugal would pay 11%. And Ireland is not even counting.

Do you believe in Europe?

“In American politics, being European is bad again”, the great Helen Cooper writes in today's 'New York Times'. But I wonder when exactly being European was a good thing here. And, above all, if Democrat and Republican politicians are not right about their bashing.

In the past, it was the ridicule debate on French fries and so on. But some of words said in this Presidential campaign are not that far from the truth and touch some deeper issues. As a European, it does bother me when Mitt Romney gets a big applause every time he says “I don't believe in Europe”. But part of his explanation is terribly real: the portrait of a pessimist society that rarely rewards its members by merit. Romney has said that if Democrats follow Europeans, “they'll substitute envy for ambition”.

The crisis was installed in Europe well before we noticed it. Just take a look at the growth rates of the Eurozone. In the last decade, the GDP grew around 2%, below what it's considered in the US as a disappointing result now. The year that the Eurozone grew more, in part thanks to Spain, was 2006, but still 3.1%. And these are just the numbers.

Spain looks like Greece. For the first time and not for what you think.

For the first time, Spain is beginning to look more like Greece. There are few similarities between their economies, their debt burden or their history in the Monetary Union. They are two different worlds, in fact. But they have in common the attitude of their governments.

So far, Greece is the only one of the bailed out countries that begged for months before it got the Eurozone aid. The other two, Ireland and Portugal, said publicly and quite aggressively that they didn't want and didn't need any loans. In March 2011, Prime Minister José Sócrates even confronted a Brazilian journalist in Brussels for asking about it a few weeks before the bailout was formalized. “We have money and we have dignity. We are not out there begging”, said the primer minister then (he lost badly the election after that).

Today the Treasury minister, Cristóbal Montoro, said that “Spain doesn’t have the market door open” just hours before Spain issues between €1bn and €2bn (between $1.24bn and $2.48bn) in bonds. It could seem that the Spanish government is more sincere (or more desperate) than the Irish and the Portuguese. But at the same time it is trying to trick Spaniards (and the press) into believing that a bailout just for the banks won't be the real deal. 

And yet giving money to financial institutions from the common European fund is a bailout. It has no other name than that. And conditions will obviously be attached also to the Government, that has a stake, for instance, in Bankia, one of the institutions receiving the money. No country will lend without conditions. It better won't.

A night at Lincoln Center. What's right (and wrong) with Spain.

Last night the Orfeón Pamplonés played 'Carmina Burana' at Lincoln Center in its debut along the New York Philharmonic. They got a cheerful and standing ovation. A lot of “bravos” were shouted and some left the theater singing. What most of the audience didn't know is that the members of this historic chorus sing for free. They are policemen, farmers, teachers or students that use their holidays to rehearse, to travel and to sing just for the pleasure of music and recognition.

They are from Pamplona, where not everything is about the running of the bulls (a very American thing to do that most Spaniards have never done, never watched and fully ignore or despise). These talented musicians are an example of excellency in a country whose education and social system rarely push you in that direction. The impulse to go through life just for the sake of survival and to lower the bar is one of the true roots of some of the troubles Spain is facing. Well beyond the rising prices of debt.

The chorus finances itself with the earnings from the concerts. But it has another arm that teaches young students music that needs public financing and private sponsors. Since the crisis began, they have lost all the companies that use to give them money. All of them. And they weren't that many to begin with.

Philanthropy in Spain is rare and not focused, as Eileen Rockefeller told me a few months ago, just before she flew to Madrid to explain the Botins and other wealthy families how to give back to your community. Maybe they support Nigerian Art in the British Museum, but most of the donations like this one -a real example- are born out of a personal inclination, far from the community and with no long term plan attached to it. Successful Spaniards rarely have the sense of commitment that in the US is routine for private institutions, big newspapers or entrepreneurs. Maybe because whoever excels doesn't perceive that the community was particularly supportive and not at all glad that something good was done.

And that's a deeper and long-term malaise that one day ends up too in an unbearable yield in the sovereign debt markets.

Germany does not pay for everything. Not yet.

There is a misconception, and not just in America, that Germany pays for bailing out its lazy and/or confused neighbors. But that is simply not true. At least not yet. The bailout fund was designed two years ago to be financed by all Eurozone Member States according to their participation in the European Central Bank. On paper, it should be the 17 of them, but the bailed out countries, Greece, Ireland and Portugal, are excluded and their part is adjusted with a slightly increased contribution from the others.

Germany is the largest contributor, as the largest and richest country in the Monetary Union, and has to back the issuance of 29% of the bonds for the 780 billion euro fund. But everyone is in it. France's share is 22%, Italy's, 19%. Spain's amounts to 12,75%.

In fact, troubled Spain is now the fourth largest contributor to the fund, another argument for Berlin against bailing out the State or its banks. The next one, Netherlands, backs less than half of that share. If the Spanish State were to receive aid, the adjustment of its share would be the most painful so far. Among the three forgiven countries, the largest share would have been for Greece, and just 2,8%. A fund with less partners would be the scenario that Germany has feared in the last two years. The stepping out of Spain would start to compromise seriously the future of the fund itself and its substitute, more permanent one that should be in place next year.

Bailing out Bankia? Not so new

The big news in Spain today is that José Manuel Durao Barroso, president of the European Commission, will suggest to use the European bailout fund to help banks directly, not just States. There are big headlines about it with Bankia in mind. However, this is not new. It has been a long standing position of the Commision, which has not the last word on this (the Eurozone Goverments do).

In July 2010, two months after the birth of the bailout fund, Olli Rehn, the commissioner in charge of Economic and Monetary Affairs, said this money (then 750 billion euros) should be used for banks if needed. He said it first at an off the record briefing. Scared by German reaction, his staff tried to deny it, but then the commissioner said it again, this time on the record.

We weren't talking about Spanish banks then. They were among the best according to the EU banking stress tests. Still in denial, Rehn said, "I don’t believe this will have to be used...The European banking sector is strong overall".