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ya sudah lah: peranK ajA … lanksunk :( :301110

November 28, 2010

U.S., South Korea begin joint military exercises

8:28pm EST
… sebagai investor, mana yang paling baik? kondisi ketidakpastian, atawa kepastian … api di balik sekam, atau latihan perang, atawa perang beneran … menurut gw kondisi ketidakpastian adalah MUSUH UTAMA investor pada saat bullish … kondisi kepastian adalah KAWAN KARIB investor pada saat bearish … saat krisfinalo 2008, sang kawan karib itu AKHIRNYA DATANG … sementara pada 2007-2008 menjelang krisfinalo, jelas MUSUH UTAMA yang datang … saat ini, kisseuro (CIUM EURO = krisis euro) dan perang dingin saudara (UJUNG TOMBAK 2 RAKSASA: sang yuan n bung dolar) adalah sumber ketidakpastian pada saat bullish, jadi DEJA VU lage kah, kayanya iya 😦 …
Selasa, 30/11/2010 06:09 WIB
Krisis Semenanjung Korea Membuat Pelancong Takut Datang
E Mei Amelia R – detikNews

Jakarta – Ketegangan antara Korea Utara dan Korea Selatan di berdampak terhadap pemasukan dalam negeri kedua negara berseteru itu. Bagaimana tidak, pelancong bisnis dan wisatawan membatalkan perjalanannya ke Korea Selatan karena takut.

Seperti dikutip dari The Straits Times, Selasa (30/11/2010) Juru Bicara Badan Promosi Investasi Perdagangan Korea mengatakan perusahaan Sony Jepang membatalkan perjalanan eksekutif yang dijadwalkan akan berkunjung awal Desember ini. Perusahaan Honda bahkan melarang kunjungan bisnis dan sekelompok pembeli Polandia membatalkan kunjungan ke sebuah forum bisnis.

Hal ini membuat Badan ini membentuk tim internasional khusus untuk meyakinkan pengusaha asing agar tidak khawatir dengan kondisi tersebut. Asosiasi Perdagangan Internasional Korea juga telah membentuk tim untuk menangani rasa takut investor tersebut.

“Kami mendapatkan banyak panggilan yang bertanya tentang status quo di Korea,”kata General Manajer tim, Park Chun Il.

“Sebagian besar dari mereka bertanya apakah pengiriman akan tiba tepat waktu, tetapi sampai sejauh ini belum ada yang membatalkan kontrak. Banyak panggilan dari pembeli Jepang karena mereka sangat berhati-hati dan tertarik dalam situasi Korea,” kata Park.

(mei/anw)
Selasa, 30/11/2010 05:42 WIB
Wikileaks Sebut China Siap Tinggalkan Korea Utara
Anwar Khumaini – detikNews

Jakarta – Dokumen yang membocorkan kawat-kawat diplomasi yang diterbitkan situs Wikileaks benar-benar membuat dunia panik. Tak cuma membuat Amerika Serikat Gerah atas bocornya diplomasi negara Adi Kuasa itu, Wikileaks juga menyebut China, yang selama ini bersekutu dengan Korea Utara siap meninggalkan negara Kim Jong-il tersebut.

Dalam situs Wikileaks seperti yang dilansir AFP, Selasa (30/11/2010), Wakil Menteri Luar Negeri Korea Selatan, Chun Yung-woo, mengatakan kepada Duta Besar AS untuk Korsel, Korea Utara tidak lagi dianggap sebagai sekutu yang berguna atau dapat diandalkan.

Para pejabat Korea Selatan juga mengatakan bahwa China tidak akan mampu menghentikan keruntuhan Korea Utara.

“China siap meninggalkan Korea Utara dan akan menerima penyatuan Semenanjung Korea,” demikian isi bocoran seperti yang tertera dalam situs Wikileaks sebagaimana dilansir Guardian, Senin (29/11/2010).

Selama ini, China memang sekutu terdekat Korut. Selain memiliki kesamaan ideologi yakni komunis, baik China ataupun Korut masuk dalam keanggotaan Six Party Talks.

Six Party Talks merupakan dialog denuklirisasi di Semenajung Korea. Six Party Talks terdiri antara lain Rusia, Cina, Korea Utara, Korea Selatan, Jepang, dan Amerika Serikat.

(anw/mei)

South Korean President Lee Myung Bak vowed to make Kim Jong Il’s regime pay for military attacks as China sought talks to defuse tension on the Korean peninsula.

“It’s become clear that more patience and tolerance only leads to bigger provocations,” Lee said today in a national address from Seoul. “North Korea will be made to pay for any further provocation no matter what.”

Lee’s comments indicate a reluctance to agree to a meeting with North Korea that it might view as a victory less than a week after it shelled a South Korean island, killing four people. “It is difficult to expect North Korea to give up its military adventurism and nuclear weapons,” he said.

“Emergency” discussions involving the two Koreas, China, the U.S., Russia and Japan should be held next month in Beijing, Wu Dawei, China’s top envoy, said yesterday. The time isn’t right for a meeting, Lee told visiting Chinese State Councilor Dai Bingguo the same day in Seoul, Yonhap News said.

The Korean won was little changed after sliding 1.9 percent against the dollar on Nov. 26. The Kospi stock index dropped 0.3 percent as of 10:40 a.m. in Seoul, adding to last week’s 2 percent decline.

South Korea will consider China’s proposal “very cautiously,” the Ministry of Foreign Affairs and Trade in Seoul said in a commentary posted on its website.

North Korea “will deal a merciless military counter-attack at any provocative act of intruding into its territorial waters,” according to a Rodong newspaper commentary carried yesterday by the North’s official Korean Central News Agency. U.S. and South Korean warships led by the aircraft carrier USS George Washington have begun four days of drills in the region.

Sumber : BLOOMBERG.COM
South Korea Resists China Calls for Six-Party Talks on North
By Sungwoo Park and Bomi Lim – Nov 28, 2010

South Korea resisted China’s call to resume six-party talks with North Korea, as its navy began maneuvers with U.S. warships amid threats of a “merciless” response by Kim Jong Il’s regime.

“Emergency” discussions involving the Koreas, China, the U.S., Russia and Japan should be held next month in Beijing to address increasing military tensions on the Korean Peninsula, Wu Dawei, China’s top envoy for the negotiations, told reporters in Beijing yesterday. The time isn’t right for such a meeting, South Korean President Lee Myung Bak told visiting Chinese State Councilor Dai Bingguo yesterday in Seoul, Yonhap News said.

South Korea will consider China’s proposal “very cautiously,” the Ministry of Foreign Affairs and Trade in Seoul said in a commentary posted later on its website.

North Korea “will deal a merciless military counter-attack at any provocative act of intruding into its territorial waters,” according to a Rodong newspaper commentary carried yesterday by the North’s official Korean Central News Agency. U.S. and South Korean warships led by the aircraft carrier USS George Washington have begun four days of drills in the region.

‘Best Possible Action’

President Lee will make a national address at 10 a.m. local time today to give his government’s view on the attack by North Korea.

In calling for the six-party talks, China wants to look like it’s taking “some initiatives on this important matter,” said Li Cheng, the head of research at the John L. Thornton China Center at the Brookings Institution in Washington. North Korea also would like to resume the talks, so this is “the best possible action for China, from China’s perspective,” he said in an e-mail.

Victor Cha, who holds the Korea Chair at the Center for Strategic and International Studies in Washington, said the Obama administration probably will find China’s suggestion “totally useless.”

“People have been calling for getting back to talks for the past three years,” Cha said. “It’s typical no-risk, no- cost, no-commitment China.”

Residents of South Korea’s Yeonpyeong island, where four people were killed and 20 wounded in a Nov. 23 artillery bombardment by the North, were temporarily ordered to take refuge in bomb shelters yesterday after more shelling was heard on the North Korean mainland.

‘Focused on Restraint’

U.S. Admiral Michael Mullen, chairman of the Joint Chiefs of Staff, said the U.S. is trying to prevent tensions over last week’s attack on the disputed maritime border from escalating into a more significant confrontation.

“We’re very focused on restraint and not letting this thing get out of control,” Mullen told CNN in an interview. “Nobody wants this thing to turn into a conflict.”

The shelling of Yeonpyeong revived tensions that flared after an international inquiry concluded that North Korea torpedoed the South Korean warship Cheonan in March and following North Korea’s claims of advances in its nuclear program. North Korea said that, if true, reported civilian casualties in its artillery attack were “very regrettable.”

“But the enemy should be held responsible for the incident as it took such inhuman action as creating ‘a human shield’ by deploying civilians around artillery positions and inside military facilities,” state-run Korean Central News Agency said Nov. 27.

Joint Naval Drills

The U.S. called the naval drills, which include four smaller warships as well as the George Washington, “defensive in nature” and said they were initially planned before the shelling of Yeonpyeong.

The nuclear-powered carrier, which holds about 85 aircraft and is served by a crew of 6,500, was last in waters off the Korean Peninsula in July as part of drills after the Cheonan’s sinking, which killed 46 sailors.

China’s Xinhua News Agency said Choe Tae Bok, chairman of North Korea’s Supreme People’s Assembly, will visit China Nov. 30 to Dec. 4.

The Korean won was Asia’s worst-performing currency against the dollar on Nov. 26, sliding 1.9 percent versus the dollar, as the risk of conflict deterred investment in the nation. The Kospi stock index fell 1.3 percent.

China Warning

Shipping was warned to avoid an area of the Yellow Sea parallel to China’s northeastern city of Qingdao while gunnery exercises take place from today to Dec. 3, according to the U.S. National Geospatial-Intelligence Agency. Qingdao lies about 615 kilometers west of Seoul.

China’s Foreign Ministry warned against having the exercises in China’s “exclusive economic zone” without its authorization, Xinhua reported. The Pentagon reiterated that the U.S. military notified China of the planned exercise, as it has in the past.

President Barack Obama, along with Japan’s Prime Minister Naoto Kan and South Korean President Lee, have called on China to use its influence to temper North Korea’s actions. China is North Korea’s main economic and political benefactor.

China has the most leverage with North Korea and “it’s really important that Beijing lead here,” Mullen said.

North Korea’s actions destabilize the region, “and China has as much to lose as anybody in that region with the continuation of this kind of behavior,” he said.

McCain Comment

Senator John McCain of Arizona, the Republican nominee for president in the 2008 election, said China “is not behaving in a responsible fashion” in the dispute and that the U.S. needs to “make adjustments in our policies regarding China.”

While McCain said the six-party talks would be a “fine first step,” he said China must do more to restrain its ally, North Korea.

The shelling of Yeonpyeong, which has a military base and a civilian fishing community, was the first attack of its kind since the 1950-1953 Korean War, which ended with an armistice rather than a treaty.

South Korea is considering reinstating North Korea as the “main enemy” in its defense guidelines, Yonhap News reported Nov. 27, citing a government official it didn’t identify. The term may be restored in a Defense White Paper following North Korea’s artillery attack, the Korean-language news agency said.

Defense Chief

President Lee on Nov. 26 appointed former Joint Chiefs of Staff Chairman Kim Kwan Jin, 61, to replace Defense Minister Kim Tae Young, who quit amid criticism that the military’s response to the shelling was inadequate.

Russia’s Foreign Minister Sergei Lavrov and his Chinese counterpart Yang Jiechi urged prevention of further escalation on the peninsula and vowed to “work toward easing the tension between the two Korean parties, as well as resuming the six- party talks” aimed at ending North Korea’s nuclear arms program, during a Nov. 27 telephone call, according to an e-mailed statement from the Russian ministry.

The western sea border, demarcated by the UN after the war and never accepted by North Korea, was the scene of deadly naval skirmishes in 1999 and 2002. The North contends the border should have been drawn further south in order to include Yeonpyeong and four neighboring islands as part of its territory.
Korut Siapkan Peluru Kendali
Minggu, 28 November 2010 – 14:17 wib
Baskoro Pramadani – Okezone

SEOUL – Sebuah laporan mengabarkan Korea Utara (Korut) telah mempersiapkan peluru kendali tipe SA-2 di dekat daerah perbatasan dengan Korea Selatan (Korsel). Hal ini menyusul latihan militer (perang) yang dilakukan Korsel bersama dengan Amerika Serikat (AS).

Barisan peluru kendali Korut tampaknya ditujukan untuk pesawat jet Korsel yang terbang dekat Northern Limit Line (Garis Batas Utara). Garis ini adalah tanda batas kedua negara.

Kementerian Pertahanan Korsel menolak berkomentar atas laporan ini.

Korsel dan AS hari ini memulai latihan perang di wilayah selatan, jauh dari garis perbatasan Korut-Korsel. Wilayah perbatasan kedua Korea tengah dalam kondisi memanas setelah serangan yang dilakukan Korut ke pulau milik Korsel pada Selasa lalu. Insiden tersebut menewaskan empat orang dan melukai 18 orang lainnya.

Peluru kendali SA-2 buatan Soviet, yang digunakan Korut, memiliki jangkauan 8 hingga 30km.

Sebuah sumber yang dikutip AFP, Minggu (28/11/2010) mengatakan peluru kendali lainnya di pantai barat Korut juga telah dipersiapkan. Di antara peluru kendali tersebut adalah jenis Samlet dan Silkworm yang memiliki jangkauan hingga 95km.

(fmh)

China proposes emergency talks on Korea crisis
Photo
8:35am EST

By Kim Do-gyun and Jo Yong-hak

YEONPYEONG, South Korea (Reuters) – China called for emergency talks on resolving a crisis on the Korean peninsula on Sunday, and Seoul and Tokyo said they would study the proposal, as the U.S. and South Korean militaries started a massive drill.

Beijing’s move to bring the two Koreas to the negotiating table comes after global pressure on China to take a more responsible role in the standoff and try to rein in ally Pyongyang.

China made clear that the talks would not amount to a resumption of six-party disarmament discussions which North Korea walked out of two years ago and declared dead. South Korea said it would carefully consider China’s suggestion.

Both Beijing and Pyongyang have been pressing regional powers to return to talks, in some form or other, for the past few months, in a move analysts say is designed to extract concessions.

China, which agreed with South Korea that the situation was “worrisome,” suggested the emergency talks for December among North and South Korea, host China, the United States, Japan and Russia. It did not say whether Pyongyang had agreed to join.

Japan was non-committal. “We want to respond cautiously while cooperating closely with South Korea and the United States,” Kyodo news agency quoted Deputy Chief Cabinet Secretary Tetsuro Fukuyama as saying.

Beijing has longstanding bonds with Pyongyang, and has sought to shield its small, poor neighbor from a backlash that China fears could draw an even more ferocious reaction from North Korea and dangerously destabilize the region.

Critics in Washington and other capitals say China’s approach amounts to coddling a dangerous nuclear-armed state.

South Korea’s marine commander on Saturday vowed “thousand-fold” revenge for the North Korean attack. North Korea said that if there had been civilian deaths, they were “very regrettable,” but that South Korea should be blamed for using a human shield.

It also said the United States should be blamed for “orchestrating” the whole sequence of events to justify sending an aircraft carrier to join the maritime maneuvers.

Yonhap new agency in Seoul said North Korea, whose ailing leader, Kim Jong-il, is preparing to hand over power to his youngest son, had moved surface-to-air and surface-to-surface missiles to frontline areas, days after it shelled Yeonpyeong killing four people. The North’s official KCNA news agency warned of retaliatory action if its territory is violated.

South Korea’s Defense Ministry told journalists to leave the island on Sunday because the situation was “bad.” Many residents evacuated earlier said they did not want to return.

In Seoul, life carried on normally for the city’s more than 10 million residents, with downtown shopping districts jammed with people despite the freezing temperatures, and cafes decked with Christmas decorations doing brisk business.

“I am worried, but not that worried that I need to stay at home,” said Eunhye Kim, an usher showing people from a packed theater in the capital. “They don’t really want to make war … there’s no gain for either side.”

PRESSURE ON CHINA

The around-the-clock exercises, in waters well south of the disputed maritime boundary off the west coast, are being held in the face of misgivings by China and threats of all-out war from North Korea.

The chairman of North Korea’s Supreme People’s Assembly will visit China from Tuesday, the official Xinhua news agency said.

China has not taken sides in the conflict and declined to blame North Korea, unlike the United States, for the sinking of a South Korean naval vessel in March.

“We ask that China make a contribution to peace on the Korean peninsula by taking a more fair and responsible position on South-North Korea ties,” South Korean President Lee Myung-bak said he had told a visiting Chinese delegation.

Washington says the four-day drill is intended as a deterrent after the worst assault on South Korea since the end of the Korean War in 1953.

Seoul expects jitters in financial markets to settle in the short term unless North Korea carries out further provocations, Yonhap quoted a senior Finance Ministry official as saying.

The nuclear-powered carrier USS George Washington, which carries 75 warplanes and has a crew of over 6,000, has joined the exercises and will be accompanied by at least four other U.S. warships, an official from U.S. Forces Korea said.

South Korea has deployed three destroyers, frigates and anti-submarine aircraft, Yonhap reported.

(Additional reporting by Cheon Jong-woo, Jack Kim and Jeremy Laurence in Seoul; Chris Buckley and Sui-Lee Wee in Beijing and Ed Klamann in Tokyo)

(Writing by Nick Macfie; Editing by Andrew Marshall)

SEOUL (Reuters) – The United States and South Korea began joint military exercises in waters west of the Korean Peninsula Sunday that have been opposed by regional giant China and have led to North Korea threatening “consequences.”

The exercises, which Washington says are intended as a sign of deterrence to North Korea, come less than a week after the North shelled a South Korean island near the disputed maritime boundary and killed four people.

An official from U.S. Forces Korea told Reuters the nuclear-powered aircraft carrier USS George Washington had joined the four-day exercises.

The George Washington, which carries 75 warplanes and has a crew of more than 6,000, will be accompanied by at least four other warships.

South Korean President Lee Myung-bak told ministers and aides to be ready for further “provocation” by North Korea during the drill.

“There is the possibility that North Korea may do some unexpected action, so please perfectly prepare against it through cooperation with the Korea-U.S. joint force,” Lee was quoted by a spokesman as saying.

North Korea’s KCNA news agency said on Saturday: “If the U.S. brings its carrier to the West Sea of Korea at last, no one can predict the ensuing consequences.”

China has said it was determined to prevent an escalation of the violence in the Koreas and warned against military acts near its coast.

South Korea said China had sent senior officials including State Councilor Dai Bingguo to Seoul for a meeting Sunday with South Korean Foreign Minister Kim Sung-hwan.

The U.S. military said the exercises, planned long before Tuesday’s attack, were designed to deter North Korea and were not aimed at China.

“We’ve routinely operated in waters off the Korean peninsula for years,” said Captain Darryn James, a Pentagon spokesman. “These latest provocations have been by the North and they need to take ownership of those, not us.”

(Reporting by Cheon Jong-woo; Editing by Raju Gopalakrishnan)
Dollar Strengthens Most in Three Months on Debt Concern, Tensions in Korea
By Allison Bennett and Catarina Saraiva – Nov 27, 2010

The dollar gained the most since August against six major counterparts as concern that Europe’s debt problem will worsen and military action in Korea will escalate boosted demand for the U.S. currency as a refuge.

The greenback rose against the yen for a fourth straight week, the longest streak in 20 months, after North Korea shelled a South Korean island and said “escalated confrontation” will lead to war. The euro fell for a third week versus the greenback as investors speculated Portugal and Spain will be the next European countries to need a financial rescue. The U.S. added jobs in November for a second month, data next week may show.

“The euro has further to fall against the dollar,” said Kathy Lien, director of currency research at online currency trader GFT Forex in New York. “If there is a war amongst the Koreas, the yen would fall off aggressively against the dollar.”

The Dollar Index rose for a third week, gaining 2.4 percent, the most since the five days ended Aug. 13, to 80.382. IntercontinentalExchange Inc. uses the gauge to track the U.S. currency against the euro, yen, pound, Canadian dollar, Swiss franc and Swedish krona. It reached 80.522 yesterday, the strongest level since Sept. 21.

The euro tumbled 3.2 percent to $1.3242, from $1.3673 Nov. 19. The three-week decline was its longest since May. The 16- nation currency has lost 5.1 percent this month. It slid 2.5 percent against the yen to 111.37, from 114.23 last week.

Longest in 20 Months

The greenback rose 0.7 percent against the yen to 84.10, from 83.55 yen. It was the fourth weekly gain, the longest winning streak since the six weeks ended March 6, 2009.

Europe’s common currency fell against 14 of its 16 major counterparts as the bonds of the region’s most-indebted countries dropped after Ireland agreed to become the second nation to seek a bailout, after Greece. The Financial Times Deutschland reported euro-area policy makers were pushing Portugal to follow suit to shield Spain from contagion.

The extra yield investors demand to hold Irish 10-year bonds instead of their German counterparts rose to a euro-era record 6.56 percentage points, while the spread of Portugal’s 10-year debt over German bunds touched 4.55 percentage points. The Spanish-German 10-year spread increased to 2.64 percentage points, according to Bloomberg generic data. That’s the most since the introduction of the euro in 1999.

Finance Minister Elena Salgado of Spain said there’s “absolutely” no risk that her country will need a bailout.

Rating Cut

Standard & Poor’s Ratings Services lowered Ireland’s long- term sovereign rating two steps to A from AA-. Irish officials raced to complete an aid-package deal before financial markets reopen next week.

“The story in Europe is going to continue; they won’t be able to stop the contagion to other countries,” said Blake Jespersen, director of foreign exchange in Toronto at Bank of Montreal. “All Asian currencies are suffering from the tensions in Korea. Those two things are really causing the market to take pause.”

The yen was poised for a 4.4 percent monthly loss versus the dollar, weakening from 15-year highs it reached in October, as the U.S. dispatched the aircraft carrier USS George Washington to take part in naval exercises off the Korean coast.

“If there is an escalation in the Korean tensions, then that certainly is a negative for Japan’s already-struggling economy,” said Omer Esiner, chief market analyst in Washington at Commonwealth Foreign Exchange Inc., a currency brokerage. “The proximity to the crisis might be something that’s keeping investors wary of the Japanese yen.”

Won Plunges

The South Korean won fell the most in five months as North Korea said the naval exercises naval exercises moved the peninsula “closer to the brink of war.” The North Korean artillery attack on Nov. 23 killed four people.

The won slid 2.2 percent, the most since the five days ended June 11, to 1,159.63 per dollar.

Canada’s dollar gained against 15 of its 16 most-traded counterparts for the week even as it lost 0.4 percent to C$1.0213 per dollar as European and Korean concerns damped investor risk appetite. It strengthened 1.5 percent, the biggest daily jump in almost three months, on Nov. 24 as Russia said it began adding the currency to its international reserves.

“So far the amounts are very small, but there’s perhaps potential for increasing our holdings,” Alexei Ulyukayev, first deputy chairman of Russia’s central bank, said in an interview in Moscow.

The Australian dollar, called the Aussie, touched the lowest level in seven weeks against the greenback after Reserve Bank Governor Glenn Stevens said the nation’s interest rate is appropriate for the “period ahead.” It fell 2.2 percent to 96.45 U.S. cents, from 98.66 on Nov. 19, and touched 96.13.

New Zealand’s dollar was the worst performer among major currencies. It tumbled 3.7 percent, the most since the five days ended Aug. 13, to 74.99 U.S. cents amid shrinking risk appetite.

The U.S. economy added 145,000 jobs in November after a gain of 151,000 in October, according to the median forecast of economists in a Bloomberg News survey before the Labor Department reports the data on Dec. 3.

Spreading from Ireland to Iberia
To stop the euro’s meltdown, Zapatero must revive Spanish reform

Nov 25th 2010 | from PRINT EDITION

HAD Ireland’s government expected to be rewarded by investors after caving in to pressure to seek salvation from the European Union and the IMF, it was soon disabused. So were those who hoped that the crisis engulfing the euro could be contained at the River Liffey. Unlike the relief rally when the EU bailed out Greece in May, investors this time barely paused for breath before continuing to dump Irish assets, as well as those of Portugal and Spain. The euro’s future will be secure only when this contagion is banished. And that, it is now clear, crucially depends on what happens in Spain.

Europe’s rescue plan is based on the idea that Ireland and the rest just need to borrow a bit of cash to tide them over while they sort out their difficulties. But investors increasingly worry that such places cannot, in fact, afford to service their debts—each in a slightly different way. In Ireland the problem is dodgy banks and the government’s hasty decision in September 2008 to guarantee all their liabilities. Some investors think this may end up costing even more than the promised EU/IMF loans of some €85 billion ($115 billion)—especially if bank deposits continue to flee the country (see Buttonwood). Ireland’s failing government adds to the doubt, because it could find it hard to push through an austerity budget before a new election (see article). In Greece the fear is that the government cannot raise enough in taxes or grow fast enough to finance its vast borrowing. Likewise in Portugal, which though less severely troubled than Greece nevertheless seems likely to follow Ireland to the bail-out window.

If the panic were confined to these three, the euro zone could cope. But Europe’s bail-out fund is not big enough to handle the country next in line: Spain, the euro’s fourth-biggest economy, with a GDP bigger than Greece, Ireland and Portugal combined.

On the face of it, the Spanish fears look exaggerated. Although it shares something of Ireland’s banking woes and of Greece’s wretched competitiveness, it is in less trouble than either. Its public debt, at around 60% of GDP, is below both Germany’s and the EU average. Its big banks are strong. Its multinationals are increasing their exports. In May, when investors ditched Spanish assets during the Greek panic, José Luis Rodríguez Zapatero, Spain’s prime minister, abandoned the notion of spending his way out of recession. Instead he ordered spending cuts and then tax rises to trim the budget deficit from 11% of GDP in 2009 to 6% next year. And, prodded by the Bank of Spain, the authorities are trying to force through mergers of cajas, the troubled savings banks that financed Spain’s disastrous property bubble.

Then Mr Zapatero, who has shown no real understanding of the need for reform, made a big mistake. Partly because those measures won him some respite from the markets, and partly because his U-turn brought a ten-point fall in support for his Socialist Party and a general strike by his friends in the unions, he put off other reforms. Now he is once more facing wild-eyed markets and a widespread perception that Spain’s economy will fail to grow. Unemployment is stuck at over 20%, while inflation is higher than in Germany. Public debt is low, but the debts of Spanish households and firms are far above the European average. They are being financed from abroad: the current-account deficit is still over 4% of GDP. The banks and the cajas have yet to own up to the full extent of losses on property loans; the impenetrable accounts of regional governments invite suspicion.

Zapateuro

When markets are eaten up by worry it is never easy to change their minds. If he is to do so, Mr Zapatero must take several steps fast. First he must produce a credible medium-term fiscal plan. That means coming clean about debts in the banking system and the regions and speeding up a plan to raise the pension age from 65 to 67. Second, he must do more to help Spanish firms compete—because once it is clear that Spain can grow, its debts will look a lot less scary. His labour-market reform was very timid. A rigidly centralised system of wage bargaining mandates annual pay rises, come what may. He has postponed reforms to pensions and collective bargaining until next year. They may then fall hostage to local and regional elections, before a general election in 2012 that the Socialists will surely lose. So he should redouble efforts to forge a pact with the opposition, and push on with reforms.

The future of the euro rests with Germany and the European Central Bank—they, after all, are the places with the money. But right now, Mr Zapatero is the key. If he acts swiftly, he could play a vital part in saving the currency from collapse.

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