Whether or not struggling Spain will request a bailout has been an issue troubling investors for several weeks. Now, according to a senior European source, the Spanish have gotten over their initial reluctance and ‘are ready to request aid’.
When asked of Spain’s current stance, a spokeswoman for Spanish Prime Minister Mariano Rajoy asserted: ‘What we are focused on is to get the decisions of the June summit on the banking union implemented. That would send a strong message of confidence to the markets.’
Many have suspected that Rajoy was determined to sidestep the exacting conditions demanded in return for a sovereign bailout and was even stalling a bailout bid until after the Basque Country and Galicia hold their regional elections on October 21st.
But now some are arguing that an aid request was being held back because of German intervention rather than as a result of Spanish hesitancy and pride.
It has been stated that German Finance Minister Wolfgang Schaeuble argued that Spain’s reforms will be rewarded by investors in the near future and that as the nation is moving in the right direction when it comes to meeting its economic commitments it has no need of a bailout.
Reliable sources have also privately commented that German Chancellor Angela Merkel was keen to avoid raising the issue of independent bailouts for troubled nations with her unwilling parliament.
When asked directly by Reuters news agency if the largest economy in the Eurozone was encouraging Spain to hold off applying for a bailout a spokesman for the German government ambiguously said: ‘Every country decides for itself. Germany isn’t pushing in one direction or the other’.
It has also been said that Eurozone officials are contemplating introducing an Enhanced Conditions Credit Line. If implemented, support from the currency bloc’s rescue funds could be used to keep Spain in the credit markets.
The Pound to Euro exchange rate is currently trading at 1.2483
The Pound to US Dollar exchange rate is currently trading at 1.6147
The Pound to Australian Dollar exchange rate is currently trading at 1.5646
The Euro to US Dollar exchange rate is currently trading at 1.2931
The Euro to Pound exchange rate is currently trading at 0.8008
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