BRUSSELS (MNI) – EU and Spanish officials are not in talks on a
sovereign aid programme, the European Commission said on Friday.
“There are no negotiations under way for any other sort of
programme with Spain,” a spokesman for the Commission told journalists
at a regular briefing.
EU and Spanish officials were in contact at all levels on a number
of issues “but what is not underway is any sort of discussion on any
particular sort of programme for Spain,” the spokesman said.
Media reports Thursday said that Madrid had been discussing the
possible conditions that could come should Spain formally request the
help of the Eurozone’s bailout funds to ease the government’s borrowing
costs on the primary market, and possibly trigger further assistance
from the European Central Bank on the secondary market.
EU and Spanish officials are focused on implementing the programme
agreed by Eurozone finance ministers to aid Spanish banks with up to
E100 billion, the spokesman said.
Madrid is racing to finalise new legislation to aid struggling
banks and close down failing ones that must be in place by the end of
the month, but a final indication of individual banks’ specific needs
won’t be ready for a couple of months, said the spokesman.
Under the terms of the Spain’s agreement with Eurozone governments
for bank sector aid, unsecured bond holders are expected to suffer
losses before taxpayers, creating a political headache for Madrid
because retail investors hold large amounts of preference shares in some
of the most troubled banks.
Although the agreement says that senior bondholders should be
spared losses, it is too early to discuss the precise nature of the
burden sharing, the spokesman said.
–Brussels newsroom: +324-9522-8374; pkoh@marketnews.com
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