Rajoy Says Spain Doesn’t Need a European Rescue Deal Now
Prime Minister Mariano Rajoy said Spain doesn’t need a European bailout now as he stopped short of ruling out an eventual request.
“Today we don’t need it,” Rajoy said in an interview with Cadena Ser from Brussels, where he attended a European Union summit. “If it’s necessary, we will use it, and if it’s not, which it isn’t at the moment and that’s why we haven’t used it, well we won’t.”
Rajoy, who said in October that sometimes “the hardest decision” is making no decision at all, has kept investors guessing since August as to whether he’ll seek a rescue that would allow the European Central Bank to buy the nation’s bonds. The Spanish Treasury has sold all the debt it planned this year and is now building a buffer for 2013.
“No EU country has said it won’t use this instrument if it needs it, and if anyone did, in my opinion, they would be making an enormous mistake,” Rajoy said.
Even so, Rajoy told reporters after the summit was over that “Spain won’t lose its access to markets. It has never lost it. In fact in the last bond auction, yesterday, it sold three- year, five-year and 28-year bonds successfully and so Spain will not have any problem.”
‘We Shall See’
He declined to comment on whether there’s a yield threshold that would prompt him to seek rescue. “I can’t give more details,” Rajoy said. “It may seem opportune in the future or not, we shall see.”
While Rajoy said reducing the budget deficit is “necessary”, he declined to estimate how much it may be this year after it was as large as Greece’s last year, the second- biggest in the euro zone after Ireland’s.
“We will see what the deficit figure is once the budget execution for all the administrations is completed,” he said, days after Budget Minister Cristobal Montoro signaled the nation may miss its deficit goal in 2012. “The European Commission understands that Spaniards and their government have made a significant effort,” he said,
Spain has already received one bailout from the euro region’s rescue fund of as much as 100 billion euros ($131 billion) for banks overwhelmed by the collapse of the real- estate boom. Spain expects to use about 40 billion euros of the facility, and even as the government remains on the hook for the funds, Rajoy said today that the banks themselves will pay it back.
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