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ECB "Ready to help Spain at any time"

Source: El Pais - Mon 26th Nov 2012
ECB 'Ready to help Spain at any time'

The Vice President of the ECB said today how the Bank is ready to act to lower Spain's borrowing costs if the Spanish Government eventually opts to tap the European Stability Mechanism (ESM).

The ECB has made seeking assistance from the ESM a prior requirement to it buying the sovereign debt of euro-zone members in the secondary market through its Outright Monetary Transactions (OMT) program.

Asked by reporters in Berlin whether he believes Spain will seek to have the ECB activate OMTs, the VP commented : "That's still our expectation and we are operationally ready for that," although he insisted it was up to Spain to decide whether or not to go to the ESM.

The Partido Popular has taken advantage of more favorable market conditions to put off making a decision on whether to seek a bailout from the ESM. The spread between the yield on the Spanish benchmark 10-year government bond and the German equivalent was at just over 420 basis points in late trading on Monday, down from a euro-era record high of 650 in July before ECB President Mario Draghi said the bank was willing to do everything within its powers to safeguard the euro.

Rajoy has said he will make a decision on whether to seek help from the ESM based on the "best interests" of the Spanish people. Asked about the possibility of a bailout, Economy Minister Luis de Guindos said: "Spain's position on this issue hasn't changed at all."

Comment on this Story

 
@Bill - Nothing like a bit of healthy debate! lol! I do agree the Euro project is a failed project which to be fair was an attempt to emulate the USA. But with so many cultural and political divides across the EU, you would have thought someone might have questioned the viability of such an expensive exercise. Spain has more political divides, not to mention politicians, than any other EU member state! My only fear is that with such staggering amounts of money involved, any breakup of the single currency will no doubt cost the average Joe in the street everything they had worked hard to accumulate...
Ed Bishop - Tue, 27th Nov 2012
Well, as a matter of fact I don't really disagree with you much at all, but your comments (both of them) don't really seem to have much relevance to the article here, nor to my first comment. I really should not have engaged with your first comment at all, as it seems merely to be what is probably a rather too well-worn 'hobby horse'. Ah well ... ;) My original comment was that countries like Spain, if they are ever to hope to recover their economies, need to withdraw from the failed Euro project as soon as possible. One of the few things, perhaps the only thing, that our former Prime Minister (when Chancellor) ever did was to resist Blair's attempt to take the UK into the Euro disaster. That would not be a 'painless' solution, but would result in far less long-term damage than the present failed monetary policy.
Bill Cameron - Tue, 27th Nov 2012
@Bill - So by your explanation, voters should vote for the lesser of all evils or protest vote to get their voices heard..?? Sorry, but this just doesn't work... It never has! What must happen is politicians to get off their self endorsed moral high grounds and tackle the issues which really matter to the electorate. Public service used to mean serving the public, but nowadays it's all self indulgence. Too much wastage, jobs for the boys and money for the inner circles. There should have been no need to cut services in this crisis. The burden of debt on the public has crippled economies the world over and only the countries which have not borrowed beyond their means are experiencing massive growth!
Ed Bishop - Tue, 27th Nov 2012
Well, I certainly believe in a 'small State' (the bane of all bureaucrats and politicians), so along with much reduced taxation would come much reduced availability of so-called 'public services' (e.g. health and education, plus state pensions, etc), but so far as I am concerned it should also mean only minimal interference in how people live their lives, provided only they do not interfere with how others live their lives. In practice what many people want is low taxation, but to still have available all the services they have become familiar with, plus the right the tell others how to live their lives (which is unfortunately what UKIP, for example, seems to have at its core); it is not practical. But the way to get there is not simply to 'boycott' voting, as you suggest - all that will achieve is an even more remote bureaucracy and 'political class' that will not even have the check of effective opposition to what they want to do.
Bill Cameron - Tue, 27th Nov 2012
@Bill - Interesting theory, however the reasons are much, much more sinister yet the solutions are far easier than politicians would have you believe. Take for example the UK in the good times when the economy was booming. Why was the Govt. borrowing so much money? Why were other Govt.'s borrowing so much money? Simple household economics suggest when income increases, save some of it just in case. When income falls, cut spending. However, Govt.'s chose to continue borrowing astonishing amounts of money! And still do. Where has all the money gone?! The simple fact is that all politicians have interests in financial markets. Govt.'s sell bonds which are bought by financial institutions which the politicians have a stake in. It's a legal way of siphoning money from the public purse into the pockets of politicians. It all stinks of corruption and self interests by politicians - The solution is simple, the public need to boycott elections. Not one single vote should be cast. This would send a massive shockwave across the planet that the public will no longer tolerate politicians dictating our lives to us when they are supposed to be elected to represent us.
Ed Bishop - Tue, 27th Nov 2012
Reading this kind of story (which I have read far too many of over the past 3 or 4 years) sounds more and more like a drug-pusher trying to coax an addict into taking another 'fix'. Spain (and Greece, Italy and perhaps Ireland and Portugal, too) aren't going to solve their systemic problems until they separate themselves from the failed Euro and resurrect separate currencies to allow them to devalue against Germany, Finland and the Netherlands; the only reason I didn't mention Cyprus is that its economy, like Ireland and Portugal really, is too small to matter. Unless of course they think the solution really is to pauperise whole swathes of their populations. Attractive as it is to be in a currency union with countries like Germany, their economies simply don't make this credible in the longer term.
Bill Cameron - Mon, 26th Nov 2012