Top European officials deny Spanish bailout bid

14th June 2010, Comments 0 comments

A string of leading European figures on Monday denied persistent press reports that Spain is preparing a request for bailout aid.

Such funding "is not even a working hypothesis," said Luxembourg prime minister and euro chief Jean-Claude Juncker after talks with European Commission head Jose Manuel Barroso.

"Not for the commission either," Barroso said at a joint press conference. "The commission has no intention of preparing a specific plan for Spain."

Pressed earlier in the day, a spokeswoman for Barroso had insisted 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 in a move designed to calm markets which had switched attention to Spain and others after a Greek bailout was separately agreed.

Since Friday, a string of reports in Germany but also in Spain have said that Madrid was ready to apply for help, with the 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.

"We deny (this), the same as the German government and the European commission," a Spanish economy ministry spokeswoman told AFP.

"Spain is not negotiating with any European institution about additional financing," Spanish Economy and Budget Minister Carlos Ocana said.

Madrid "is working to ensure that these rumours remain unfounded, as is currently the case," he added.

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

Group of Seven finance ministers from Britain, Canada, France, Germany, Italy, Japan and the United States held a telephone conference call earlier on Monday.

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.

Calls to check if Spain was discussed were referred to the G7's Canadian chair but there was no immediate response.

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

The Spanish parliament approved a 15-billion-euro austerity plan last month, after a 50-billion-euro austerity package announced in January.

Its battle to tame its annual deficit will be formally assessed on Tuesday, along with 11 other countries in breach of the EU deficit limit of three percent of Gross Domestic Product.

The others are Austria, Belgium, the Czech Republic, France, Germany, Ireland, Italy, the Netherlands, Portugal, Slovakia and Slovenia.

Britain should have been the 13th EU member state to come up for inspection, but with the new government planned an emergency budget on June 22, its review has been put back.

© 2010 AFP

0 Comments To This Article