Bloomberg News

Spanish Government ‘Won’t Seek Rescue’ From EU, Deputy PM Says

July 27, 2012

Spain won’t seek a European bailout and ruled out extending aid it’s set to receive beyond the 100 billion euros ($123 billion) committed to its banks, Deputy Prime Minister Soraya Saenz de Santamaria said.

“I will respond with absolute clarity: the government will not seek a rescue, nor is asking for a rescue an option,” she told reporters in Madrid today. She repeated the comments when asked if Spain would ask the European rescue fund to buy the nation’s bonds.

Saenz spoke as German Chancellor Angela Merkel and French President Francois Hollande were scheduled to discuss by phone how to help Spain and implement agreements reached by European leaders last month. Spain is increasingly reliant on domestic banks for financing as foreign investors shun the nation’s bonds amid record borrowing costs, data showed today.

While Spanish ministers including Foreign Minister Jose Manuel Garcia-Margallo have called on the European Central Bank to stem the surge in Spanish bond yields, Saenz censured such comments today.

“No government can tell the ECB what it can or should do, the ECB is independent,” she said.

It’s up to governments to take measures to calm tensions on markets and to implement agreements reached with other European leaders, she said. Deficit cuts are a prerequisite for an economic recovery, she told reporters, after data showed the unemployment rate rose to 24.6 percent in the second quarter, the highest since at least 1976.

To contact the reporter on this story: Emma Ross-Thomas in Madrid at erossthomas@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net


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