International Monetary Fund visit to Spain sparks fresh finance fears

A MISSION from the International Monetary Fund (IMF) will visit Spain today to carry out a routine study of the country’s financial system, as part of an annual global report, a government official said yesterday.

Concerns over Spanish banks’ exposure to the collapsed property market remain acute and are major reasons behind market distrust of Spain and other poorly performing countries on the fringes of the Eurozone.

But the Economy Ministry said there was nothing out of the ordinary about the IMF visit.

“It’s an ordinary visit carried out by the IMF as part of its global financial stability report, the same kind as it as carried out in other countries,” a ministry spokeswoman said.

The mission will visit the Economy Ministry, Bank of Spain and major banks, newspaper El Mundo said.

The newspaper added that once the evaluation is concluded, the IMF may offer Spain a flexible line of credit, an instrument offered to Mexico, Poland and Colombia in the past.

Unlike a bailout, a flexible line of credit is a deposit that can be used by countries experiencing temporary financing problems.

The Prime Minister’s office declined to comment. The Bank of Spain was not immediately available for comment.

Last year IMF head Dominique Strauss-Kahn said he believed Spain was taking the right measures for economic stability.