Germany’s Schaeuble Said to Oppose Spanish Sovereign Bailout
Schaeuble praised the reform efforts of Spain and Italy, the officials said on condition of anonymity because the meeting was held in private. The finance minister said Spain doesn’t need to apply for a full program because economic and fiscal progress made since implementing reforms means that a full bailout isn’t necessary, the officials said.
Spanish Prime Minister Mariano Rajoy has so far declined to say whether he will seek a full bailout, saying he needs time to study a proposal announced by European Central Bank President Mario Draghi to lower government borrowing costs. Rajoy has already sought a rescue for Spain’s banks of as much as 100 billion euros ($128 billion).
“We will take a decision taking into account the interests of the Spanish people and the euro zone,” Spain’s European Affairs Minister Inigo Mendez de Vigo said today in an interview with Bloomberg Television. Any decision on possible outside aid “has nothing to do” with regional elections next month.
Spanish bonds rallied last week after Draghi said the ECB will buy unlimited quantities of sovereign bonds as long as governments in countries such as Spain and Italy request aid from Europe’s rescue funds and sign up to strict conditions. The yield on Spanish 10-year bonds rose 7 basis points to 5.70 percent today.
Schaeuble and Chancellor Angela Merkel, who also attended the meeting, reiterated to lawmakers that Draghi’s plan to buy sovereign bonds is within the ECB’s mandate, the officials said.
The ECB plan is an efficient solution “which is going to work as a stopgap,” billionaire investor George Soros said in a speech in Berlin today.
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