Italy, Spain will not need rescue programmes: Rehn

5th August 2011, Comments 0 comments

Neither Italy or Spain will need to be bailed out, EU Economic Affairs Commissioner Olli Rehn said on Friday.

"I do not believe either of these countries will need a programme," Rehn said as he sought to sooth market concerns that the third and fourth largest economies in the 17-nation eurozone could follow in the footsteps of smaller beleaguered euro nations, Greece, Ireland and Portugal.

Italy and Spain have faced record borrowing costs on markets this week amid fears the pair could be next in line for trouble as Europe's debt crisis spreads from weaker peripheral countries.

The market unrest seen in the last few days was unjustified "on the grounds of economic fundamentals," Rehn said.

"It is not justified for Italy. It is not justified for Spain."

Rehn said the drama on markets this week was simply "incomprehensibe," given there had been no major changes in the economies of either nation and that both had committed to ambitious reforms for "fiscal consolidation (and) ... to put their economies back on track."

© 2011 AFP

0 Comments To This Article