Spain May Use Its Debt Instead of Cash for Bankia Group

Spain is considering using debt issued by the government or its bank-rescue fund instead of cash to prop up the Bankia group, adopting a mechanism that would free it from raising the money from investors.

The government hasn’t made a decision on whether to use its debt to recapitalize the nationalized lender and will decide in two or three months, a spokesman for the Economy Ministry, who asked not to be named in line with its policy, said in a phone interview today. Prime Minister Mariano Rajoy said at a Madrid news conference today the government hadn’t spoken to the European Central Bank about such a step.