Zapatero denies rumours of rescue package

Prime Minister Zapatero yesterday described a rumour on the Spanish stock market that Spain will be asking for an EU rescue as ‘absolute madness’. He demanded that critics simply looked at the data and the facts of the situation.

The rumours, which intimated that Spain may need to borrow as much as 280 billion €, saw the IBEX 35 plummet on Tuesday, closing 5.41% down, in the second largest fall of the year to end at 9,859, losing the 10,000 level and reaching a new low for the year. Bank shares were among those hardest hit.

The International Monetary Fund later denied the rumours which linked Spain with the situation currently being seen in Greece.

There is huge expectation ahead of today’s meeting between the PM and the leader of the opposition – the first for 18 month, which gets underway in the Moncloa Palace at 10am.

The given agenda for the meeting is the Spanish contribution of 9.4 billion for the EU and IMF rescue plan for Greece, and the search for a way forward on the merger of the trouble Spanish savings banks. Legislation and agreement is needed to allow these banks to merge across regional divides.