Spain: government rules out full bailout

26 July, 14:12

(ANSAmed) - MADRID, JULY 26 - The Spanish government rules out a full sovereign bailout request to the European union after meetings held by Economy Minister Luis de Guindos with his German and French counterparts in the last few days.

"We will not ask to be rescued like Greece, Portugal and Ireland nor ask for a European fund to buy Spain's sovereign debt", government sources were quoted as saying today by El Mundo newspaper.

Prime Minister Mariano Rajoy is trying to avoid a full-blown government bailout request in order not to go through the Troika - the International Monetary Fund, European Union and European Central Bank - as is the case for Greece, Ireland and Portugal.

The government is also ruling out to request state bailout funding which would enable it to apply for ECB loans and buy stocks of sovereign debt, as suggested by the Austrian member of the ECP, Evald Nowtny. Madrid, the sources said, is not considering this option as it would imply surrendering control of its political economy.

During a visit to Paris yesterday, de Guindos spoke to his French counterpart Pierre Moscovici about the need to start "before the end of the year" a bank union supervised by the ECB, enabling the direct recapitalization of banks which would ease market tensions.

According to a joint statement by Paris and Madrid, a "quick negotiation" will start after the Commission's proposals expected by September. The current situation of Spain's and Italy's economies will be discussed on August 2 in Madrid by Italian Prime Minister Mario Monti and his Spanish counterpart Mariano Rajoy. (ANSAmed)
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