After Credit rating downgrade Spain through the rating agency Fitch, the pressure on the highly indebted country is growing. The news agencies Reuters and dpa reported unanimously, citing government circles, that Spain will probably apply for help from the EFSF euro rescue fund today. It is about money that should flow into the support of the country’s banks. Before the announcement of the application, a conference call of the euro finance ministers was planned.
According to IMF calculations, at least 40 billion euros are necessary
According to the International Monetary Fund (IMF), the Spanish banking sector needs a safety net of at least 40 billion euros. This result of a stress test emerges from an IMF report on the stability of the Spanish financial system, which was partially published in Washington. The actual capital requirement is up to twice as high because of possible restructuring costs and loan defaults, said an IMF employee.
The government did not confirm the reports of an impending request for assistance. The Spanish Budget Secretary Marta Fernandez denied that Spain had to be saved. The claim that the euro finance ministers are planning a conference call today is also wrong.
"No decisions have been made"
Deputy Prime Minister Soraya Saenz de Santamaria merely stated that there was no stipulation for or against an auxiliary request. "No decisions have been made in any direction," she said. She is also not aware of an official meeting at European level about the Spanish banks.
So far, the government has always emphasized that it did not want to apply for help – at least as long as no reliable figures were available about the banks’ actual financial needs. A government spokeswoman said a government spokeswoman said that a plan to reorganize the institutes would only be presented once the IMF and the two consulting firms commissioned had submitted their report on the financial situation. The report from the two consulting firms Roland Berger and Oliver Wyman is expected in mid-June.
EU: "No news on a Spanish request"
The EU Commission did not confirm the reports either. "There is no news on a Spanish request," said the spokesman for EU currency commissioner Olli Rehn. "If an application should come, the appropriate instruments are available and can be used in accordance with the agreed guidelines," said the spokesman.
The EFSF can grant loans that can be used to support troubled banks. However, the respective euro country must apply for the aid money and in return meet requirements. Spain would most likely have to commit to a reorganization and reform of the banking sector, but would likely avoid strict budget reorganization requirements.
Merkel: "We’re not pushing anyone under the rescue package"
Chancellor Angela Merkel affirmed that the German government is not pushing any country in the euro zone under the rescue package. "It is always clear that the countries that want to participate in solidarity make this request themselves," she said. The instruments to stabilize the eurozone are ready. The decision on an application for aid rests solely with the governments of the individual countries. "That has not happened so far and that is why Germany will not exert any pressure or anything here," said Merkel. Earlier, Eurogroup leader Jean-Claude Juncker had stated with regard to Spain: "If the country needs help, it will get support".
Admitted financing problems
This week, Spain’s finance minister Christobal Montoro had openly admitted his country’s problems in raising money for the first time and thus greatly unsettled the financial markets. Yesterday borrowed the land 2.1 billion euros on the capital markets without any problems, but again had to offer higher interest rates for the paper. The government’s capital requirements are closely related to the problems facing the country’s banks, which rely on support. How much money they exactly need and how much help Spain could apply to the EFSF against this background is currently unclear.