European Central Bank Governing Council member Ewald Nowotny said any delay in Spain requesting a European Union aid would increase the costs of a bailout.
While declining to comment on rumors that Spain may ask for aid this weekend, Nowotny said that he “of course considered it sensible to request aid, because the longer you wait with revamp measures, the more expensive it gets. Therefore, I consider it sensible as part of a coordinated plan,” Nowotny told reporters in Vienna today.
“Spain currently has a problem with its banks and of course a real estate bubble,” Nowotny said. “This means we have a situation that isn’t completely dissimilar to what we had in Ireland.”
Regarding measures that would be part of a bailout plan, Nowotny listed a “reduction of the budget deficit as quickly as possible,” the merger of banks and a reduction of their balance sheets. “As Ireland showed, if one does this consequently, it definitely can be successful,” he said.
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