LUXEMBOURG (MNI) – Spain should submit a formal bid for aid soon
and will probably do so, German Finance Minister Wolfgang Schaeuble said
Friday.

Briefing the press following a meeting of European finance
ministers, Schaeuble stressed that he and his colleagues had advised
Spain “to make the request quickly.”

“We expect a request from Spain in the next days,” he said.

If the permanent European Stability Mechanism is not yet in force
when Spain does so, then its temporary precursor, the European Financial
Stability Facility, will be responsible for providing the assistance, he
said.

“It’s not a matter of a preference” for the ESM or the EFSF versus
the other, he said.

Investors are worried that if Spain submits its request to the ESM,
which in contrast to the EFSF has preferred creditor status, then loans
made by the Eurozone to Madrid would have priority over private
creditors in the event of a default.

Schaeuble reaffirmed that Ireland and Portugal are on the right
track. Cyprus, hit hard in the wake of Greek turmoil, will soon make a
decision as to possible financial help, Schaeuble reported having been
told by his Cypriot counterpart.

He refused to address the issues being raised simultaneously in
Rome, where the leaders of the four largest Eurozone economies met
today, saying there was “no sense … in interpreting in any way or
commenting” on possible differences of opinion there.

He called again for “more Europe as a reaction to the crisis of
confidence,” cautioning that this “can’t be done in the short term.”

“If we initiate credible measures for the medium term and in the
short term exhaust the room to maneuver that we have according to the
existing treaties,” then we are on the right path, he said.

As the brand new Greek government was not fully represented here,
Schaeuble had little to say about that country other than to remind
again that “Greece has to fulfill its obligations” while conceding that
Athens has “a difficult task, no question about it.”

The top financial sector jobs still to be filled in Europe were not
on the agenda here, he said.

— MNI Frankfurt bureau: +49 69 720 142. Email: frankfurt@marketnews.com

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