Spain has time to wait for clarity on EU aid: economy minister
MADRID (Reuters) - Spain has time to wait for clarity on what a full European rescue would involve as it has already covered the majority of its debt needs for the year, Economy Minister Luis de Guindos said in a newspaper interview published on Sunday.
"We will find out the details and then we will draw up a precise calendar," de Guindos said when asked by ABC newspaper if Spain would ask for aid in September. "We've got time ... the Treasury is financing itself relatively well in the market, given the circumstances."
Prime Minister Mariano Rajoy signaled for the first time on Friday that he may seek a full-blown aid package but said he had not yet made a decision on the matter. Spanish bonds surged after the comments on expectations aid would be forthcoming.
The European Central Bank said on Thursday it was preparing to buy Spanish and Italian bonds in order to reduce those countries' crippling borrowing costs but only after EU bailout funds were triggered and countries had asked for help.
Economy Minister de Guindos said the market was not performing normally.
"It's clear that this is an abnormally functioning market and when that happens, institutions must intervene. That is essentially what the ECB said last Thursday," he said.
A Reuters poll of nearly 50 economists found most expect the ECB to start buying Spanish and Italian bonds in September.
Ten-year Spanish government bond yields fell 30 basis points on the day on Friday but at 6.95 percent yields were still close to levels considered unsustainable. On the primary market, Spain easily sold 3.1 billion euros of debt on Thursday at yields well below recent peaks.
An aid request for Spain would involve negotiating terms with other euro zone countries and any package will come with a strict set of conditions. Continued...