Rajoy Says Indecision Is Hardest Choice of All as Bailout Looms

Spanish Prime Minister Mariano Rajoy is trying to turn his bailout indecision into a crisis- management strategy.

“Sometimes the hardest decision is not to take any decision,” Rajoy told the Spanish Parliament today in response to criticism from lawmakers over his perceived dithering. “So what someone in government has to do when dealing with issues that aren’t mathematical, where one never knows if one is going to get it right or not, is to weigh things up well and be very aware of the consequences of one’s decisions.”

Rajoy has spent almost three months considering the consequences of requesting a bailout that’s been on the table since the European Central Bank unveiled its new bond buying plan in September. The approach has puzzled and frustrated euro region officials who want Spain to unleash the power of the ECB’s tool-kit to show that it’s fully operational.

“One country that still has an elevated spread and has problems with its banking system has hesitated and is hesitating about whether to activate the anti-spread mechanism,” Italian Prime Minister Mario Monti said on Oct. 23. “This country, as you know, is not Italy.”

Italy, like France, has been nudging Rajoy to ask for help, a move that could help shore up confidence in the ECB bond plan and protect their own bond yields.

Spain is the leading candidate for Europe’s next bailout with financing needs of at least 207 billion euros ($269 billion) next year and a 144 billion-euro hole in its banking system.


Rajoy though, refuses to be rushed. The premier hails from the north-western region of Galicia where people are famous for sitting on the fence and has made a virtue of patience throughout his career. He lost two general elections before he finally led his party into power last year.

Rajoy is not alone in his approach to governing. German Chancellor Angela Merkel delayed a decision on aid for Greece in 2010 until the last possible moment before backing a bailout.

Yet even her allies are losing patience with Rajoy’s prevarication.

“He must spell out what the situation is,” Michael Meister, finance spokesman for Merkel’s Christian Democratic Union, said in an interview last month. “Rajoy evidently has a communications problem. If he needs help he must say so.”

To contact the reporters on this story: Ben Sills in Madrid at bsills@bloomberg.net;

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

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