EU, Germany explore Spanish bank rescue

EU, Germany explore Spanish bank rescue
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German and EU officials are reportedly urgently exploring how to rescue Spain’s debt-laden banks, even though Madrid has not yet requested assistance and is resisting being placed under international supervision.

Spanish Economy Minister Luis de Guindos, who was in Brussels preferred to talk about banking union, and ignored repeated bailout questions: “I have absolutely not discussed any intervention in Spain’s banks today. Of course what we are saying is that with more European integration we would undoubtedly get out of this difficult situation, this crisis. That’s our message today.”

In Paris, French Finance Minister Pierre Moscovici said any future help for Spanish banks would mean banking supervision, but not Madrid having to sign up to economic reforms: “If the Spanish government wishes at any point – and it’s Spain’s sovereign decision – we have instruments of solidarity in the eurozone which can be mobilised very quickly.”

German officials also said that a deal was in the works which would allow Spain to recapitalise its stricken banks using EU aid but avoid economic reforms imposed from outside.

While Berlin remains firm in its rejection of Spain’s calls for Europe’s rescue funds to lend directly to its banks, the officials said that if Madrid put in a formal aid request, funds could flow without it submitting to the kind of strict reform programme agreed for Greece, Portugal and Ireland.

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