–Notes Official Denial Of IMF Aid Package For Spain
–Spain Concedes Need For Further Fiscal Consolidation In 2011

LONDON (MNI) – European Central Bank Executive Board Member Jose
Manuel Gonzalez-Paramo said today that he believes financial markets are
“resettling again” following the recent jitters over the sovereign
crisis in the euro zone periphery.

Following a speech here at the Euromoney Global ABS 2010
conference, Paramo told reporters that he would not comment on reports
of an International Monetary Fund aid package for Spain.

He noted “it has been denied by all the three institutions
mentioned” – in a reference to the IMF, the Commission and the ECB.

“I don’t comment on comments that are not based on fact,” he said.

In remarks on the current market situation, Paramo said that the
current sovereign crisis was not something unique to the euro zone but
said that the current market attitude towards the zone’s periphery
was not about ‘fairness’ – “it’s about market sentiment”, he added.

Paramo described the current market situation as “quite peculiar”
but noted that the markets appear to be resettling again.

“The difference is between countries which have taken measures and
those which have not – and this is the issue which has to be focused
on,” he said.

Paramo said the sovereign crisis had “nothing to do with Spain” but
had been “initiated by Greece”. Spain has taken steps to reassure
markets, including fiscal consolidation and on financial sector reforms.

Paramo said that Spain accepted the need for labour market reforms,
especially in key areas, such as market segmentation, collective
negotiations and the indexation of wages.

On fiscal consolidation, Paramo said he agreed with the EU
Commission that more would be need to be done in 2011, but it was
important that the regional governments had reacted positively to the
need for further measures.

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