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Spain on the verge of asking for a full bailout

in International Business

Spain on the verge of asking for a full bailout

Spanish Prime Minister Mariano Rajoy has come closest to admitting he is considering a bailout after months of denials.

Even now it has been expressed in a different tone, saying he would consider a full bailout for his country only once the European Central bank has fleshed out its crisis-fighting plans for buying government bonds.

“I haven’t made a decision (on a bailout) yet,” Rajoy said after a cabinet meeting. “I want to know what the unconventional measures proposed by the ECB are. We do not know what is being proposed.”

The ECB has warned that it would only help lower a country’s borrowing costs if that country’s government applied for rescue aid from the bailout funds set up by the 17 euro countries.

Eurozone members Germany and Finland oppose ECB support for Spain without promises from its government to stick to strict spending and budget plans.

The Spanish government said Friday it had submitted to the European Commission a document outlining its spending cuts and revenue increases through 2014. The statement has forecasted a 57% higher savings than previous forecasts.

A statement on the prime minister’s official Web site said the plan will save 13.1 billion Euros ($16 billion) this year, 39 billion Euros ($47.8 billion) in 2013 and 50.1 billion Euros ($61.4 billion) in 2014.

In June, Spain requested 100bn euros ($122bn) of loans from the EFSF bailout fund to help support its banks, which are struggling with bad debts from loans made in the property sector.


Tags assigned to this article:
Spain bailoutSpanish Prime Minister Mariano Rajoy

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