Bloomberg News

Spain Said to Be Ready to Seek Euro-Zone Bailout, Reuters Says

October 01, 2012

Spain is ready to seek a bailout for its public finances, Reuters reported, citing four unidentified European officials.

Germany has indicated that Spain should hold off, Reuters said. German Finance Minister Wolfgang Schaeuble said in September that Spain was on the right track and may need less support than previously thought.

Spanish Prime Minister Mariano Rajoy, who spent six months campaigning for European Central Bank President Mario Draghi to buy bonds, has been considering the benefits of seeking aid since Aug. 2. European officials are pressuring Rajoy to ask for aid, Spanish newspaper El Pais reported yesterday, citing unidentified Spanish and EU government officials.

Spanish Economy Minister Luis de Guindos said yesterday after a meeting with EU Economic and Monetary Affairs Commissioner Olli Rehn that the country is still analyzing the ECB bond-buying proposal.

Rehn yesterday also spoke with Rajoy and Spanish Central Bank Governor Luis Maria Linde. Rajoy will today meet with Spanish regional leaders, who would help shape the domestic response to a bailout.

As Rajoy faces unrest on the streets of Madrid over budget cuts and a separatist movement in Catalonia, leaders of the 17- nation euro area are confronting a tougher approach from the German-led pro-austerity bloc and talks in Athens over keeping emergency aid on track. The first of three summits in the next three months is set for Oct. 18-19.

Last month, France pressed Spain to snub German concerns and request help from the European Union to contain the euro- area financial crisis, according to three people familiar with negotiations. French officials wanted Spain to ask the EU’s bailout fund for help to consolidate gains in southern European bonds.

Chancellor Angela Merkel would prefer to bundle together bailout requests before presenting them to her country’s parliament, Reuters reported, citing unidentified European diplomats and a German official.

To contact the reporters on this story: Andrea Snyder in Washington at asnyder5@bloomberg.net; Ben Sills in Madrid at bsills@bloomberg.net

To contact the editor responsible for this story: James Ludden at jludden@bloomberg.net


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