BRUSSELS (MNI) – When Spain’s relationship with the European
Financial Stability Facility shifts to the EFSF’s permanent successor,
the European Stability Mechanism, there will be no change in the
preferred status of loans made to Spain, German Finance Minister
Wolfgang Schaeuble said early Tuesday.
Schaeuble, briefing the press after a meeting of Eurozone finance
ministers that extended well into the night from Monday to Tuesday, said
that according to ministers, the issue of preferred creditor status
“should remain as decided by heads of state and government” at their
summit last month.
“When Spain’s program shifts from the EFSF to the ESM there should
be no change in the preferred creditor status,” he said.
Heads of state and government had decided that, contrary to
original plans, the ESM should not get any preferred status; such status
had been of concern to private investors.
Although Spanish banks are obviously a problem, “otherwise Spain is
on a good path,” Schaeuble said, noting that Madrid “has initiated
considerable reforms.”
Thus, he said, “the conditionality (of assistance) will be limited
to the banking sector.”
Schaeuble reported that the ECB and EFSF had concluded a technical
agreement and said that a corresponding agreement between the ECB and
the ESM should follow when the latter is established. However, he said,
he could not “say definitively” when that might be, given the legal
hurdles to be cleared yet.
–Frankfurt bureau tel: +49-69-720-142. Email: dbarwick@marketnews.com
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