Bloomberg News

De Guindos Says Spread Mechanism to Be Fleshed Out

August 29, 2012

(Corrects amount of bailout fund to 18 billion euros in final paragraph.)

Euro-region finance ministers will work out details of a plan to bring down bond spreads at a meeting in Cyprus this month, Spanish Finance Minister Luis de Guindos said.

The European Central Bank, which has signaled it may act to support European Union bond buying, knows that the wide differences between euro-region bond yields disrupts its ability to manage monetary policy, de Guindos told reporters in Madrid.

Spain is not in talks with European Union officials about implementing further budget cutting measures, and plans to meet its fiscal targets whether the ECB intervenes or not, de Guindos said.

The decision of the regional government of Catalonia to request 5 billion euros in aid from a Spanish bailout mechanism won’t strain its finances as the Catalan request was considered when setting up the 18 billion-euro ($23 billion) fund, de Guindos said.

To contact the reporter on this story: Angeline Benoit in Madrid at abenoit4@bloomberg.net

To contact the editor responsible for this story: Andrew Davis at abdavis@bloomberg.net


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