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Competing narratives about the Spanish bank bailout, and an election in Greece next Sunday, left investors and analysts skeptical about the health of the Eurozone yesterday. Just two weeks ago Spain’s Prime Minister Mariano Rajoy dismissed speculation of a Spanish bank bailout. This past Sunday, however, he announced a 100 billion euro bank rescue by characterizing it as a “bailout without humiliation.” Rajoy claimed the deal was a victory not just for Spain, but for all of Europe, declaring, “[t]he credibility of the Euro won, the future of the Euro won, the European Union won.”

However his jubilation was undercut by reports from the Guardian that sources with the European Commission on Sunday said Rajoy’s spin was a “domestic political” act, and that Spain’s economy will be subject to much scrutiny. Germany’s Finance Minister said the European Commission, the European Central Bank, and the International Monetary Fund, commonly referred to as the Troika, and called “the men in black” by Spain’s finance minister, will be visiting Spain. Greek protestors demonstrating against austerity measures singled out the so-called Troika for criticism, and a visit from the big three institutions signals a loss of financial sovereignty for a nation.

While observers are saying the picture is not as rosy as Spain’s Prime Minister describes, the terms of the bank bailout did not include the austerity measures imposed on Ireland and Greece. Rajoy credits this to austerity measures already implemented to decrease the deficit from 8.9% of the nation’s GDP to just 3%, which have caused nearly a year of sporadic protests across Spain. There is now speculation that the bailout will affect Greek elections held next Sunday and spur the Greek and Irish governments to demand more favorable terms on loans they have received.

GUEST: Marshall Auerback, a Fellow at Economists for Peace and Security, and a Research Associate at the Levy Institute.