Spain: no bailout yet
June 7, 2012
Spain's finance minister Luis De Guindos on Wednesday sought to pour cold water on speculation that his country will seek a bailout for its banks during talks in Brussels.
De Guindos denied that Spain was in talks with other eurozone members about the possibility of supplying aid to Spanish Banks, but insisted Madrid will decide how it will plug the 80-billion-euro ($100 billion) hole in the country's banking industry within the next two weeks.
Madrid "will take decisions on recapitalization within approximately 15 days," said De Guindos.
"The Spanish bank problem is limited to certain entities which have already been treated and brought under check" by the government, the finance minister added.
The Spanish officials specified that Madrid was awaiting the publication of an IMF report and independent audit of the banking sector, both due in June, before taking any more steps with regards to the matter.
De Guindos' reassurances come after the country's prime minister, Mariano Rajoy, asserted that there remained "no other option but to move towards greater banking integration," in a statement to the Spanish parliament on Tuesday. On Saturday, Rajoy also said that Spain would theoretically be willing to cede a degree of budgetary sovereignty with a view to making such integration a reality.
Disagreements over recapitalization continue
Meanwhile, alarm at the state of recession-hit Spain's finances continued to grow on Wednesday as the country's disagreement with Germany over the recapitalization of Spanish banks showed no sign of being resolved. Madrid has said it wants the European Stability Mechanism (ESM) to directly supply its banks with fresh funds. But Berlin reaffirmed on Wednesday that only governments are permitted to seek financing from bailout funds.
In contrast, Paris on Wednesday said it was in favor of letting the ESM directly fund Spanish banks.
"France favors the ESM being used to directly recapitalize banks with the appropriate supervisory conditions," French Finance Minister Pierre Moscovici said, adding that the option would be discussed by European representatives at a summit scheduled for the end of June.
sej/slk (AFP, Reuters)