The European Central Bank must take forceful and unlimited steps to buy sovereign debt to help Spain reduce its refinancing costs and eliminate doubts over the euro zone's future, Spain's economy minister said in comments published on Saturday. "There can be no limit set or at least (the ECB) can't say how much they will use or for how long," when it buys bonds in the secondary markets, Luis de Guindos told Spanish news agency EFE.
The Spanish government will study the details of the ECB's debt-buying programme, which are likely to be outlined before the Eurogroup meeting mid-September, before making a decision on applying for more European aid, de Guindos said. Spain is at the centre of the euro zone debt crisis on concerns it may need a full bailout, which could stretch euro funds to breaking point, on top of up to 100 billion euros ($122.97 billion) it has already requested for its struggling banks.
Prime Minister Mariano Rajoy has said his government would study any measures by the ECB and the potential conditions attached to any EU aid before deciding whether to apply for help. In response to a renewed intensification of the debt crisis, ECB President Mario Draghi said on August 2 the ECB may buy more government bonds, but only once countries had turned to the bloc's rescue funds for help and agreed to strict conditions.
"I believe Spain has presented its budget adjustment programme and its structural reforms, which from a general point of view, have been accepted as sufficient and appropriate," de Guindos said. Rajoy has introduced austerity measures worth around 10 percent of GDP to reduce the public deficit to within EU-guidelines of below 3 percent of GDP by end-2014 as well as reforms to the financial system and labour markets.
Comments
Comments are closed.