Spain offered 2 hopeful lifelines
Source: Agencies |
May 31, 2012, Thursday
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Print Edition
Print Edition
THE European Commission threw Spain, the latest frontline in Europe's debt war, two potential lifelines yesterday, offering more time to reduce its budget deficit and direct aid from a eurozone rescue fund to recapitalize distressed banks.
Spanish government borrowing costs lurched higher and Madrid stocks hit a nine-year low with investors rattled by the parlous state of its banks fleeing to the relative haven of German bonds.
European Union Economic and Monetary Affairs Commissioner Olli Rehn said Brussels was ready to give Spain an extra year until 2014 to bring its deficit down to the EU limit of 3 percent of gross domestic product if Madrid presents a solid two-year budget plan for 2013-14, something it has committed to do.
The concession was on condition that Spain reins in overspending by its autonomous regions, reform the financial sector further and recapitalizes its troubled banks.
Spanish government borrowing costs lurched higher and Madrid stocks hit a nine-year low with investors rattled by the parlous state of its banks fleeing to the relative haven of German bonds.
European Union Economic and Monetary Affairs Commissioner Olli Rehn said Brussels was ready to give Spain an extra year until 2014 to bring its deficit down to the EU limit of 3 percent of gross domestic product if Madrid presents a solid two-year budget plan for 2013-14, something it has committed to do.
The concession was on condition that Spain reins in overspending by its autonomous regions, reform the financial sector further and recapitalizes its troubled banks.
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