Rajoy denies that Spain’s bailout plea is imminent

 
Julian Harris
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SPANISH Prime Minister Mariano Rajoy rebuffed suggestions that his government would imminently request a full bailout, during a press conference in Madrid yesterday.

A European source had previously said that the Spanish were now “ready to request aid”, according to Reuters, yet Rajoy responded with a blunt “no” when asked if a call for aid was fast-approaching.

Rajoy was speaking to reporters on the day that data revealed that 4.7m Spanish people are now unemployed, according to an official register. The figure was up by 1.7 per cent in September, as workers in the struggling economy were hit by the end of the summer holiday season.

The confusion over Spain’s bailout position saw stocks dip across the pond in New York, with paymaster Germany believed to be pressuring Spanish leaders against requesting a full rescue.

Spanish authorities revealed an ambitious budget for 2013 on Monday, which some analysts took as a signal to Brussels that Spain would be prepared to impose the austerity measures that would come as conditions of a rescue package.

“The markets will likely play a big role in the timing of any bailout,” said the Open Europe think tank.

“A sharp surge in Spain’s borrowing costs could certainly precipitate a request,” it added. Spanish leaders may prefer to hold off any request for a bailout due to upcoming regional elections in the Basque country, Galicia and Catalonia.

The troika of international lenders – the European Commission, European Central Bank (ECB) and International Monetary Fund (IMF) – currently have inspectors in Greece, holding crunch talks over the indebted country’s progress in implementing reforms and cutting its annual deficit.

The payment of upcoming tranches of the Greek bailout is conditional on its government appeasing the troika.

But Greek finance minister Yannis Stournaras said last night that he is unsure if an agreement will be in place by the time of the European Union’s next big summit on 18 October.

Greek leaders held a new round of talks with troika representatives yesterday, in a bid to bridge differences over €2bn of disputed austerity cuts.

Athens has been haggling over €12bn of cutbacks, with the troika sceptical that the promises will materialise.