BERLIN (MNI) – The German government on Friday reaffirmed that the
European bailout funds were ready to support Spain, if Madrid applies
for aid and accepts the conditions tied to it.
“The decision is up to Spain. If it makes it, then the European
instruments for it are ready,” government spokesman Steffen Seibert said
at a regular press conference here. “Then everything will run under the
usual procedure: a state makes a request, it will be liable and it
accepts the conditions tied to it.”
Seibert declined to comment on rumours of a possible Eurogroup
teleconference this weekend to consider an aid request from Spain that
might be forthcoming.
Fitch Ratings on Thursday downgraded Spain’s credit status by three
notches to BBB from A, estimating the likely cost of restructuring and
recapitalising the banking sector at E60 billion to E100 billion.
The International Monetary Fund sees a recapitalisation need for
Spanish banks of less than E50 billion, the German daily Die Welt
reported Friday, citing an unreleased IMF report.
The German weekly Der Spiegel reported over the weekend that Berlin
had urged Madrid to apply for financial aid from the European bailout
fund EFSF in order to prop up its ailing banking sector, but that the
Spanish government resisted this demand.
On Wednesday, the parliamentary leader of Chancellor Angela
Merkel’s CDU/CSU bloc, Volker Kauder, openly called on Spain to apply
for financial aid. “I do think that Spain needs to tap the rescue fund –
not because of its state [finances] but because of its banks,” he said.
–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com
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