Spain and Italy play down need for rescue cash

Julian Harris
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THE LEADERS of Spain and Italy both played down their need for a full bailout yesterday, during a joint conference in Madrid.

Speaking alongside Italian technocrat Prime Minister Mario Monti, Spain’s Mariano Rajoy said a rescue package was “not essential at this moment”.

“As soon as I think it’s good for the general interests of Spain to ask for it I will ask for it. [But] while I don’t think that, I won’t,” he added.

Monti, meanwhile, insisted that Italy is not “in such a condition” to require a bailout at all. Brussels is believed to be waiting for Spain to succumb to a bailout offer, a move that could trigger the European Central Bank’s (ECB) new bond

buying plan.

Some analysts believe that any such move could ease the pressure on Italy’s borrowing costs on the bond markets, even if it did not call for its own bailout package.

Both leaders went on to stress their commitment to the timetable set out to establish a banking union, with Rajoy calling for much “greater European integration.”

And Monti also played down fears that Silvio Berlusconi’s objections to the government’s austerity measures could threaten the coalition’s


Yields on Italian bonds rose yesterday, partly blamed on Berlusconi’s comments.

Meanwhile across the Ionian sea, political relations appeared more harmonious. A senior official at Greece’s socialist Pasok party said that it would not automatically follow the Democratic Left party’s refusal to endorse the measures.

“We will safeguard political stability and stick to our strategy of safely exiting the crisis,” the official said.

Pasok will hold high level talks today in an effort to find agreement over cuts that are required to ensure that Greece receives the next tranche of its bailout.