LONDON – The European Commission denied German media reports
that EU Commission President Jose Manuel Barroso and European Central
Bank President Jean Claude Trichet are calling for activation of a chunk
of the E750 billion EU/IMF stability fund to aid debt-stricken Spain.
“Elements of the German media appear fixated on this story, but it
is completely untrue. We have received no request from Spain, no one is
calling for this, it remains an open scenario,” a Commission
spokesperson told Market News International.
The European Central Bank and the Bank of Spain declined to comment
on the reports.
A report in today’s Frankfurter Allgemeine Zeitung, citing German
government sources, said that European Union member states are
“preparing to help Spain resolve its worsening finance and debt crisis.”
The article states that German officials will lead talks on the
issue in the coming weeks. It follows last week’s Financial Times
Deutschland article that also said EU member states were preparing to
activate aid for Spain. Neither report suggested how much of the E750
billion fund might be earmarked for the purpose.
The commission spokesperson said that both stories are inaccurate
and that Madrid, although ‘under pressure,’ is taking the right
decisions to deal with its financial situation.
The spread between Spanish government bonds and benchmark German
Bunds were unchanged this morning at +189bps, below the EMU-lifetime
highs of +216bps hit during a risk-averse trading session on June 8th.
–William Wilkes, william.wilkes@ntkn.com; +44-207 862 7483
[TOPICS: M$$EC$,M$X$$$,M$CR$,MT$$$$,M$S$$$,MGX$$$]
