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Home News Spain needs trust, not new aid programme: Germany

Spain needs trust, not new aid programme: Germany

Published on 21/09/2012

German Finance Minister Wolfgang Schaeuble said Friday that Spain did not need a further aid programme but was suffering from a lack of confidence on the financial markets.

Schaeuble told members of the foreign press that he was “steadfast” in agreeing with the government in Madrid that “Spain is on the right path and needs no further programme”.

“What Spain needs is confidence in the financial markets and there Spain really has problems,” he said.

“It is hard to deny that Spain’s standing on the financial markets does not take the real economic data sufficiently into account,” he added.

The EU said on Friday it was working with the Spanish government on a national reform programme due to be announced next week, but insisted that this did not mean it was preparing a sovereign bailout.

There has been mounting speculation that Madrid may seek a full rescue on top of EU aid already agreed for its banks but said to be politically possible only once “conditions” it would have to meet in that event are thrashed out.

Eurozone sources have said that the past week has been marked by shifting opinions, with Germany and Spain resisting pressure from France and the European Commission for Madrid to request a full bailout.

Turning to Greece, Schaeuble insisted on the need to wait for a progress report by international lenders on Athens’ efforts to make reforms and cuts to unlock 31.5 billion euros ($41 billion) of bailout loans it needs to stay afloat.

“Nobody wants Greece to leave the euro,” Schaeuble said, dismissing speculation about a possible move by to write off more of its debt.

And he expressed the “firm hope” that Italy would continue on its “successful path” pursued under Prime Minister Mario Monti, including after the next elections.