Spain dismisses need for urgent bailout

LAST UPDATED: 13 Sep, 2012 @ 15:29
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Spain dismisses need for urgent bailout

SPAIN will delay a decision over whether to request a bailout after the risk premium on its government bonds dropped to its lowest point since April.

Prime Minister Mariano Rajoy told parliament it was not clear whether Spain would require assistance because the European Central Bank’s (ECB) crisis plan had reduced borrowing costs.

Spain’s 10-year bond yields have dropped significantly since ECB President Mario Draghi announced last week that the bank would be allowed to buy Spain’s debt.

“I don’t know whether Spain needs to ask for it, let’s see how the risk premium develops,” Rajoy said.

“This is a very important decision. We will have to study whether it is necessary and if it is best for Spain.

“We have to know what the conditions are, and in light of all of this we will take a decision.”

Germany helped ease the markets after the country’s constitutional court ruled that Germany could contribute to the European Stability Mechanism permanent rescue fund.

Speaking about the effect a bailout request from Spain could have on the markets, Deputy Economy Minister Fernando Jimenez Latorre said:  “The important thing is that when whatever assistance that is needed is requested, it should be well received in the markets.”


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