Spain has refuted claims that it is to seek aid from the European Union
Spain's economy ministry said today that it has not made a request for economic aid from the European Union, after a report in the FT Deutschland that the EU was preparing an aid package in case Madrid asked for it.
"This is lie. There's no rescue. There's nothing asked for, nor will there be, nothing, but nothing. I don't know where they got this from," an economy ministry spokesperson said.
The newspaper said that the EU was preparing for an aid application in the months ahead for access to the fund set up to lend to euro zone countries that run into Greek-style payments problems.
The report also cited an unnamed European Commission spokesman as saying there were no signs of a Spanish aid request at the moment.
Spain has suffered from fears that a debt crisis contagion will sweep the euro zone, particularly affecting the bloc's weaker southern members.
But Spain saw solid demand for a new 3-year benchmark bond yesterday, a positive sign for the Treasury ahead of a €16.2-billion redemption in July.
The 10-year Spanish/German government bond yield narrowed to 189 basis points from 191 yesterday, with
analysts saying a string of successful bond auctions this week, from Belgium and Portugal as well as Spain, had calmed some market jitters about peripheral euro zone debt.
Spain's unpopular minority Socialist government is having a difficult time pushing through austerity measures and reforms aimed at restoring the economy back to health and is in the midst of a massive restructuring of its banking sector.
An austerity package aimed at slashing a deficit of 11.2 per cent of gross domestic product to 3 per cent of GDP by 2013 passed parliament by just one vote in May.
REUTERS