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Eurozone partners press Spain to say if financial rescue is needed
Source: Agencies |
September 15, 2012, Saturday
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Print Edition
Print Edition
EUROZONE finance ministers pressed Spain yesterday to clarify whether it will seek financial aid after the announcement of the European Central Bank's new bond-buying program brought Madrid's borrowing costs sharply lower.
Spanish Finance Minister Luis de Guindos deflected questions about a possible aid application on arriving for talks in Cyprus, saying they would discuss in general terms the conditions for ECB intervention in the markets.
Reflecting concern among several eurozone countries that uncertainty over Spain is holding back a recovery from the bloc's debt crisis, Irish Finance Minister Michael Noonan said: "I'd like them to set out their position because it hasn't been clear over the summer what their position is."
The ECB has made clear that a Spanish request for help from the eurozone's bailout fund, and the negotiation of strict policy conditions and monitoring, is essential to trigger its bond-buying intervention in the secondary market.
Madrid is resisting any austerity conditions that go beyond European Commission recommendations it is already implementing, while north European creditors led by Germany are adamant that any aid would come with tough conditions.
"It is much more important to meet our public deficit targets and comply with our program of reform than a potential rescue," de Guindos said when asked about conditions for any financial support.
"The fundamental question here is to establish the elements of what could be an intervention of the ECB on the secondary market. I believe that's what we will do today, although it will be in a generic way and not directly in relation to Spain."
For the first time since the start of the year, the ministers' talks will take place at a time when market pressure for immediate action to solve the sovereign debt crisis is easing, rather than mounting.
The ECB's announcement that it could buy unlimited amounts of Spanish bonds, should it apply for help from the eurozone bailout fund, brought Spanish 10-year bond yields down from 7.64 percent on July 24 to 5.62 percent on Thursday.
Italian yields have fallen to around 5 percent.
Spanish Finance Minister Luis de Guindos deflected questions about a possible aid application on arriving for talks in Cyprus, saying they would discuss in general terms the conditions for ECB intervention in the markets.
Reflecting concern among several eurozone countries that uncertainty over Spain is holding back a recovery from the bloc's debt crisis, Irish Finance Minister Michael Noonan said: "I'd like them to set out their position because it hasn't been clear over the summer what their position is."
The ECB has made clear that a Spanish request for help from the eurozone's bailout fund, and the negotiation of strict policy conditions and monitoring, is essential to trigger its bond-buying intervention in the secondary market.
Madrid is resisting any austerity conditions that go beyond European Commission recommendations it is already implementing, while north European creditors led by Germany are adamant that any aid would come with tough conditions.
"It is much more important to meet our public deficit targets and comply with our program of reform than a potential rescue," de Guindos said when asked about conditions for any financial support.
"The fundamental question here is to establish the elements of what could be an intervention of the ECB on the secondary market. I believe that's what we will do today, although it will be in a generic way and not directly in relation to Spain."
For the first time since the start of the year, the ministers' talks will take place at a time when market pressure for immediate action to solve the sovereign debt crisis is easing, rather than mounting.
The ECB's announcement that it could buy unlimited amounts of Spanish bonds, should it apply for help from the eurozone bailout fund, brought Spanish 10-year bond yields down from 7.64 percent on July 24 to 5.62 percent on Thursday.
Italian yields have fallen to around 5 percent.
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