Breaking News

Tweet TWEET

Merkel Ally Kauder Says No Need to Consider EU Bailout for Spain

Spain’s government is determined to tackle its debt and there’s no need to discuss bailing out the euro area’s fourth-largest economy, according to an envoy of German Chancellor Angela Merkel’s party.

“From what I see, there is no necessity at the moment for there to be any talk of Spain having to apply for aid from a rescue fund,” Volker Kauder, parliamentary leader of Merkel’s Christian Democratic bloc, said late yesterday after meeting Prime Minister Mariano Rajoy and other Spanish officials in Madrid.

Spain is doing “everything it can” to reach Rajoy’s goal of reducing the budget deficit to 5.3 percent of gross domestic product in 2012, Kauder told reporters, speaking through a translator. “It is possible to achieve it.”

Rajoy defied European Union allies by raising Spain’s deficit target on March 2, hours after he and 24 other EU leaders signed the German-inspired fiscal pact to stem excessive debt. Merkel cited “fragility” in Spain and Portugal when she announced last week that Germany backed an increase in Europe’s financial backstop against the crisis.

Kauder, in a separate e-mailed statement, called Spain “a partner for a stability culture in Europe” and said Rajoy’s reforms during his first 100 days in office had put the country “on the right track.”

“I got an excellent impression of the government’s determination to master the debt crisis and achieve the savings goals agreed with the EU,” Kauder said. Financial markets are gaining “new confidence” in Spain.

To contact the reporters on this story: Angeline Benoit in Madrid at abenoit4@bloomberg.net; Tony Czuczka in Berlin at aczuczka@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.