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HindustanTimes Sun,26 Oct 2014

Spain eyes bailout, Germany says wait

Reuters  Madrid, October 02, 2012
First Published: 21:19 IST(2/10/2012) | Last Updated: 22:29 IST(2/10/2012)

Spain is ready to request a euro zone bailout for its public finances as early as next weekend but Germany has signalled that it should hold off, European officials have said.

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The latest twist in the euro zone’s three-year-old sovereign debt crisis comes as financial markets and some other European partners are pressuring Madrid to seek a rescue programme that would trigger European Central Bank buying of its bonds.

“The Spanish were a bit hesitant but now they are ready to request aid,” a senior European source said. Three other senior euro zone sources confirmed the shift in the Spanish position.

German finance minister Wolfgang Schaeuble has said Spain is taking all the right steps to overcome its fiscal problems and does not need a bailout. Privately, several European diplomats and a senior German source said Chancellor Angela Merkel preferred to avoid putting more individual bailouts for distressed euro zone countries to her reluctant Parliament.

Participants said there were tense exchanges at a euro zone ministerial meeting in Cyprus in mid-September when Schaeuble told his peers Berlin could not take another bailout for Spain to Parliament so soon after lawmakers approved up to €100 billion in aid in July. Asked about the reports that Germany was urging Spain to wait, a German government spokesman said, “Every country decides for itself. Germany isn’t pushing in one direction or the other.”

A spokeswoman for Spain's Prime Minister Mariano Rajoy said she was not aware of any veto from Germany for an aid request.


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