'No truth' to rumors of a Spain bailout request: IMF

4th May 2010, Comments 0 comments

The International Monetary Fund on Tuesday firmly dismissed speculation that Spain was seeking a massive loan from the lending institution.

"There is no truth to these rumors," the IMF said in a terse statement issued after multiple media inquiries.

The Spanish stock market fell by more than five percent Tuesday on fears of fresh downgrades to the nation's credit rating and speculation it would seek an IMF loan of some 280 billion euros (365 billion dollars).

Standard & Poor's last week lowered Spain's long-term sovereign credit rating to AA from AA+ on prospects that its recession could further weaken public finances.

Greece's economic crisis, which forced eurozone finance ministers and the IMF to approve a three-year 110 billion euro bailout loan package, has raised fears that struggling Spain and Portugal may also need assistance.

Spain's Prime Minister Luis Rodriguez Zapatero rejected concerns about his nation's economy Tuesday.

"Any speculation on the eurozone is totally unfounded and irresponsible," he told reporters during a visit to Brussels.

He said rumors Spain would seek an IMF bailout were "complete madness," but he warned that the speculation could be harmful.

"Rumors like this can lead to certain views and can certainly damage our interests as a country," said Zapatero, whose country holds the EU's rotating presidency. "That is intolerable."

© 2010 AFP

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