Lagarde has said it many times already, and yesterday she repeated her suggestion to the Financial Department of the International Monetary Fund (IMF): banks should be able to take loans directly from the recovery fund and severe the life line that links sovereign debt risk with banking debt.
This option could be a suitable option for the Spanish financial system, which is butting up against iron-willed Germany. Yesterday a spokesperson from Germany's Ministry of Finance hastened to obviate the possibility of direct access to these funds.
The IMF, concerned about growth, insists that there are legal grounds for the suggestion and praised the cutbacks that Spain and Italy have made. But the sacrifices these countries are making could end up useless if strategies for rebuilding the financial sector fall short.