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Spain: No request for bailout, says minister | |
(about 2 hours later) | |
Spain's economy minister has dampened speculation that the country is about the seek a bailout of its bank sector. | |
Luis de Guindos said no decision would be made until audits of the banks were completed, possibly by the end of June. | |
There have been reports in the last few days that Spain was seeking an immediate bailout from eurozone funds. | |
An IMF audit of Spain's banks is due next week, with further independent reports completed about two weeks after, Mr de Guindos said. | |
"I have absolutely not discussed any intervention in Spain's banks today," Mr de Guindos told reporters on the sidelines of meetings in Brussels. | |
Asked if Spain was preparing a request for EU aid, he said: "We are not preparing anything... we have a road map." | |
The comments helped lift shares in Spain's leading companies by about 3% in morning trading on the Madrid stock exchange. | |
However, speculation remains that Spain's bank sector is too weak to escape an eventual bailout. | |
Spain is trying to find more than 80bn euros ($100bn; £65bn) to strengthen its banks' capital buffers. | |
But on Tuesday, Spain's finance minister said the credit markets were "effectively shut" to his country, inflaming worries that the country would be forced to join Greece, Portugal and Ireland in using the European Financial Stability Facility. | |
Cristobal Montoro told Spain's Onda Cero radio "the door to markets is not open for Spain". | Cristobal Montoro told Spain's Onda Cero radio "the door to markets is not open for Spain". |
A key test will come on Thursday, with Spain due to auction up to 2bn euros of bonds. | A key test will come on Thursday, with Spain due to auction up to 2bn euros of bonds. |
'Serious situation' | 'Serious situation' |
On Wednesday, the European Commission unveiled proposals designed to stop taxpayers' money being used to bail out failed banks. | |
The aim is to ensure losses are borne by bank shareholders and creditors and minimise costs for taxpayers. | |
However, new legislation is unlikely to came into force before 2014 at the earliest, too late to protect taxpayers from any further immediate bank failures. | |
"The proposal we have today may be only useful for the future but it does not solve the current problems we face," said Sharon Bowles, chair of the European Parliament's economic and finance committee." | |
"In the short term we need further measures," she said. | |
Stefaan de Rynck, a spokesman for Michel Barnier, the EU's top regulatory official who outlined the banking plans, said: "We are faced with a serious situation today, but that does not stop us thinking about the future, and from us developing a vision about the future. | |
"Our proposal today puts a key element on the table." | "Our proposal today puts a key element on the table." |
The changes announced by Mr Barnier form part of commitments agreed by the leaders of the G20 group of major economies in September 2009. | |
They would give EU authorities the power to intervene early. | They would give EU authorities the power to intervene early. |
A new mechanism will allow authorities to reduce the claims of unsecured creditors, meaning that shareholders and creditors bear the losses, not governments and the taxpayers that support them. | A new mechanism will allow authorities to reduce the claims of unsecured creditors, meaning that shareholders and creditors bear the losses, not governments and the taxpayers that support them. |
If it wins the backing of EU countries and the European parliament, the law would mark a step in the direction of the banking union supported by European Central Bank president Mario Draghi. | If it wins the backing of EU countries and the European parliament, the law would mark a step in the direction of the banking union supported by European Central Bank president Mario Draghi. |
Are you in Spain or any other European country affected? What measures do you hope to see taken to ease pressure on your country's economy? How have you been affected by the economic situation? Send us your comments using the form below. |