Spain in pre-bailout talks with EU bodies

MADRID - Agence France-Presse

Spain’s government said Oct. 5 that it is in talks with European institutions and analyzing its options before deciding on any bailout.

Financial markets are betting Spain will apply soon for a rescue in which the European Central Bank buys Spanish bonds on the open market to curb its borrowing costs, but only in return for strict conditions.
“The mechanisms for decision making in Europe are complex,” Deputy Economy Minister Fernando Jimenez Latorre told Spanish journalists outside parliament in comments broadcast.

“What we are doing is talking to the European institutions and we are analysing the options,” he said. Spain’s heavy debt refinancing burden and high borrowing costs are widely expected to force it to seek a bailout soon, with some 30 billion euros ($39 billion) in repayments due this month.

“When we talk of a rescue, we are talking about European Central Bank intervention in the secondary market,” Latorre said in further comments reported by Europa Press news agency.

 In other countries like the U.S., Britain and Japan, central banks had intervened “rapidly and significantly” on secondary debt markets to ease financing difficulties, he said.