Spain more receptive to EU bond assistance

Posted on Aug 5, 2012 in Business | 0 comments

Spain”s conservative prime minister said this weekend his government was considering making a request to the European Central Bank for bailout assistance.

Prime Minister Mariano Rajoy told reporters in Madrid he might consider such a request in the future after receiving more details from the ECB on what conditions the bankers would place on such assistance.

“Then, depending on the circumstances, we will make one decision or another,” Rajoy said last week. “When somebody asks for something, they must know what they”re asking for.”

While Rajoy did not commit to seeking help from ECB amid Spain”s ongoing financial crisis, his statements marked a shift in attitude in Madrid about enlisting the ECB”s aid, the Wall Street Journal said Sunday. The newspaper said Spanish officials only recently began conceding in private that an ECB bailout would be necessary.

The ECB last week said it was ready to resume the purchase of government bonds to ease the European Union debt market; however individual governments such as Spain would have to make a formal request and commits to a package of strict conditions.

The Journal said that while Spain has a good cash position, it has a major debt redemption coming due in October and is also helping out regional governments caught in a liquidity squeeze.

Copyright 2012 by United Press International