Spain hopes that Portugal request for an EH bailout will draw a line under the Euro crisis. Madrid has ruled out any contagion, saying the markets know Spain is fit. Pundits say Elision’s move has helped avert a dangerous threat.
A collapse of Portugal finances might have prompted markets to pick on Spain, widely seen as the next potential domino in the Euro zone.
Analyst Francisco Lopez in Madrid insisted: “Spain is better positioned than Portugal, because of its economic structure.”
A stabilization of Spanish borrowing rates shows many investors believe that what happened to Portugal will not happen to Spain.
But analyst Oliver Roth, in financial power-hub Frankfurt, warned against complacency: “Bailing out Portugal is a short term game for the Euro governments. They have a little time to fix the structural problems of the Euro now. If they don’t do that, Spain will be next, and then the Euro will be under massive pressure again.”
Spain in recent months unveiled reforms of the labour market, pensions and the banking sector, and vows that it will not follow its ailing smaller neighbour in seeking a European bailout.