EU preparing for a rescue plan for Spain

Nathan Andrada – Fourth Estate Cooperative Contributor

Brussels, Belgium (4E) – Spain is reportedly in talks with European authorities for a fresh round of rescue plan to be announced next week.

The Financial Times reported on Friday that the EU is setting the stage for a rescue plan for Spain and unlimited bond purchases by the European Central Bank (ECB). The EU and Madrid are in discussions for the details of an economic reform package set to be announced next week.

Officials familiar with the talks say that the focus of those conversations are the conditions requested by creditors as part of the bailout program, as they need to be outlined first before an announcement of any rescue plan.

The plan is reportedly going to be unveiled next Thursday which will include structural reforms to the Spanish economy instead of new taxes and austerity measures.

The Spanish government is also likely to release a report of its banking system review, which will also include details on how the European Stability Mechanism (ESM) can recapitalize Spanish banks.

A senior EU official said Spanish finance minister Luis de Guindos is directly involved with the negotiations.

Approval of the plan by the European Union prior to next week’s announcement is seen as a move to relieve some political pressure to Prime Minister Mariano Rajoy. Madrid has been reluctant to ask for assistance from the ESM’s 500bn euro rescue fund through purchase of Spanish sovereign bonds by the ECB for fear that the EU would demand difficult conditions.

Article © AHN – All Rights Reserved

All Stories

You can leave a response, or trackback from your own site.

Leave a Reply