EU, Germany deny Spanish bailout bid as G7 ministers talk

14th June 2010, Comments 0 comments

The EU's executive and the German government denied on Monday German press reports that Spain was preparing to request European bailout funds, as G7 finance ministers prepared for talks.

"There is no plan under discussion to provide assistance to any member state today," said a spokesman for the European Union commissioner for economic affairs. "I don't know where the stories come from," he added.

"There is nothing being prepared, there is no plan (to request aid)," added a spokeswoman for European Commission chief Jose Manuel Barroso, when pressed, insisting that views attributed to her boss were "pure speculation."

EU finance ministers last week finalised an emergency fund running to 500 billion euros of loans and guarantees against borrowings in a move designed to calm markets who had switched attention to Spain and others after a Greek bailout was separately agreed.

Since Friday, a string of German reports have said that Madrid was ready to apply for help, with Frankfurter Allgemeine Zeitung daily writing on Monday that Barroso and European Central Bank chief Jean-Claude Trichet were worried about Spanish bank positions and wanted euro partners to intervene.

A German finance ministry spokesman also denied that Spain "at the present moment" had "manifestly not fulfilled conditions" required for lodging any application for assistance.

At roughly the same time, Group of Seven finance ministers were to hold a telephone conference, a spokesman for Luxembourg prime minister and euro chief Jean-Claude Juncker told AFP.

The G7 groups Britain, Canada, France, Germany, Italy, Japan and the United States, and ministers from these countries held urgent talks in mid-May, when it became clear to them that Greece's problems were spreading to other eurozone countries.

While Luxembourg's office did not say what the subject of Monday's talks was to be, ministers feared then that contagion could spread outside Europe.

Spain's economy is far bigger than that of Greece, with its banks heavily involved in Latin America, for example.

© 2010 AFP

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