–Updating 15:56 ET Story to Add Comments from Lagarde, US Tsy

By Denny Gulino

WASHINGTON (MNI) – Spain’s Deputy Prime Minister Maria Soraya Saenz
de Santamaria has been called the most powerful woman in the
conservative Spanish government and her meetings Thursday afternoon with
Treasury Secretary Tim Geithner and IMF chief Christine Lagarde occurred
amid world speculation about whether Spain will try to access the
capital markets to recapitalize its ailing banks.

The Treasury Department said following the meeting with Geithner,
“They discussed the significant progress that Spain has made on fiscal
and structural reforms, the Spanish government’s plans to strengthen its
financial sector and support recovery and job creation, and the broader
challenges facing Europe and the global economy.”

Treasury Under Secretary Lael Brainard had met with government
officials in Madrid Wednesday.

The IMF issued a similarly vague statement with Lagarde repeating
what a spokesman had told reporters earlier about any aid for Spain, “We
have not received any request to that effect and we are not doing any
work in relation to any financial support,” Lagarde said after the
meeting.

About a specific report from Dow Jones that the IMF is already
working on a contingency plan for Spain, Lagarde said, “There is no such
plan.”

Lagarde said the meeting with the Spanish official was “very
productive.”

Earlier, IMF spokesman Gerry Rice, in his regular biweekly press
briefing had said, “I can tell you the IMF is not drawing up plans that
involved financial assistance for Spain, nor has Spain requested any
financial support from the IMF.”

However, even if Spain is lobbying the Fund’s most influential
member, the United States, to help make some aid plan happen, perhaps in
conjunction with a renewed European effort, no IMF confirmation would be
expected until after a formal request was delivered, and no formal
request would be likely until the U.S. assured Spain of its support.

Saenz de Santamaria, known within the country as the vice
president, is also scheduled to attend the private Bilderberg Club
meeting over the weekend in Chantilly, Virginia, just outside of
Washington, which may after all be the primary reason for her visit.

The group’s Web site said other attendees include Bank of Canada
Gov. Mark Carney, Irish Finance Minister Michael Noonan, Polish Finance
Minister Ali Babacan, Netherlands Prime Minister Mark Rutte, Turkey’s
deputy prime minister for economic and financial affairs, and China
Deputy Foreign Affairs Minister Ying Fu, as well as numerous business
executives, think tank academics and journalists.

Saenz de Santamaria has been in that job only since December, but
before she was elevated to Cabinet rank, she was the People’s Party
chief spokesperson and the frequently seen face of the government. In
Spanish media, she has been credited with being the most powerful woman
in the government, a view not only of her own prowess but of how few
other women are in senior roles.

For a country mired in repeat recessions, with this year’s forecast
for more of the same, an unemployment rate in double digits and seeing
increasing capital flight, Spain has this week rivaled Greece as the
main European economic challenge.

With some opinion polls showing Greece sentiment evolving back
toward tolerance for the austerity necessary to preserve its
participation in the eurozone and still more than two weeks to go before
its next elections, the focus on Spain has intensified.

Earlier in the day, Fitch ratings downgraded eight of Spain’s
autonomous regions, spotlighting their own intractable debt problems.

** MNI Washington Bureau: 202-371-2121 **

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