LONDON—The euro zone's financial plumbing is badly backed up—and none of
policy makers' efforts to clear it has worked.
That was apparent Friday in fresh data from the Bank of Spain, which said the
country's banks borrowed €365 billion ($446.7 billion) from the European Central
Bank in June, a new high, accounting for 30% of all the central bank's lending.
The Spanish borrowing figure is €50 billion higher than the level in April and
is double the figure at the beginning of the year.
The data reflect one of the euro zone's great, unsolved problems
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Italy and Spain will remain in recession next year, according to the IMF, placing a question mark over their ability to refinance their banks and generate sufficient goodwill from international lenders to prevent them from going bust. Fears that Spain and Italy will need a bailout from Brussels continue to weigh on global growth following the reluctance of Germany, Finland, Holland and Austria to sanction a fund capable of handling both countries
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