Tables turn on Spain with pressure to seek bailout

Mon Sep 24, 2012 9:29am EDT
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By Jan Strupczewski and Fiona Ortiz

BRUSSELS/MADRID (Reuters) - Spain once pushed hard for Ireland and Portugal to ask for bailouts from their partners in the euro because it was keen to shelter itself from an accelerating sovereign debt crisis.

Now the tables are turned and Madrid is holding back from applying for help, not least because the Spanish government knows all too well what befell its Portuguese and Irish peers once they did seek help -- voters dumped them.

Facing an important regional election on October 21, Prime Minister Mariano Rajoy is in no rush to yield to nervous pleas, from France, Italy and indeed Ireland, that he request a rescue deal that might dampen investors' concerns about their own debt.

Dublin and Lisbon fought shy of EU and IMF help for long months in 2010-11, fuelling turmoil in the bond markets, in forlorn attempts to avoid a humiliating loss of sovereignty and lenders' demands that they draft unpopular budgets.

Now Rajoy, in office for nine months, is doing the reverse of what his Spanish predecessors urged on others, and insisting Madrid may not need help -- at any rate not right now.

Part of the procrastination is down to Rajoy's personality. The dour conservative Gallego from rainy northwestern Spain built his career on digging in his heels and letting everyone else wear themselves out until he decides he's ready to act.

People in Rajoy's homeland, Galicia, are renowned for being noncommittal and answering a question with a question. Meet a Gallego on the stairs, a Spanish saying goes, and it's hard to tell whether he is going up or coming down.

"Rajoy is resistant. That's his life. He prefers to take a bad decision in three months to taking a good one tomorrow," said a former government official from Rajoy's People's Party.   Continued...

A man walks past the door of a closed down business in central Madrid September 24, 2012. REUTERS/Andrea Comas