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Spain to discuss ECB bond-buying conditions next week

Spain to discuss ECB bond-buying conditions next week
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Spain says it will discuss the conditions attached to the European Central Bank’s new bond-buying scheme with eurozone finance ministers next week.

There has been much speculation that Madrid would be first in line to tap the new programme although this has been repeatedly denied by Spanish Prime Minister Mariano Rajoy.

The new rescue plan announced by ECB chief Mario Draghi has seen financial markets rally and was welcomed by many political analysts.

“The ECB did exactly the right thing. It said that the responsibility of whether to help a country or not lies with eurozone finance ministers, meaning with the European Rescue Mechanism, the future ESM,” said Daniel Gros from Centre for European Policy Studies.

“If those ministers decide to help a country, the ECB will be there with liquidity. This is exactly the business of the ECB – nothing more and nothing less,” he added.

Germany has criticised the new bond-buying programme, warning that eurozone governments may put off vital economic reforms.

But one analyst described the ECB’s proposals as a game changer that will create a substantial and credible firewall.

Sources told the Reuters news agency that the EU has urged Spain to request a bailout in time for it to be approved at a mid-October EU leaders’ summit.

Madrid will need to plug a 28 billion euro hole in its finances by the end of next month.