Spanish PM Dismisses IMF Aid Rumours
May 7th, 2010
It is “absolute madness” to think Spain will need the kind of aid package debt-laden Greece is receiving from the European Union and the International Monetary Fund, Spanish Prime Minister Jose Luis Rodriguez Zapatero said on Tuesday.
The premier spoke at a press conference in Brussels after the Spanish stock market plunged more than 5 percent on a rumor that Madrid would need up to 280 billion euros ($364 billion) from the EU and IMF.
Vowing to battle such rumors, Zapatero said he trusted in the “strength and solvency” of Spain’s public finances and in the country’s ability to recover from a recession that has pushed the jobless rate above 20 percent.
“We can’t be spending all day paying attention to speculation, predictions, hypotheses, to what could happen,” the prime minister said, pointing out that Spain’s ratio of debt to gross domestic product is 20 percentage points below the median for the EU’s 27 member-states.
People have been talking about risks to the Spanish banking sector since the beginning of the world financial crisis, Zapatero said, even though his country’s banks have fared better than those of many other countries.
He called suggestions that Spanish savings banks are threatened by a rise in mortgage delinquencies “absolutely unfounded and disproportionate.”
Regarding Greece, Zapatero said that with the 110 billion euro ($143 billion) package from the EU and the IMF, Athens now “has what it needs” to reassure its creditors.
He also praised the “courage” of Greek Prime Minister George Papandreou in implementing the harsh and unpopular austerity measures demanded by the EU and the IMF as a condition of aid.
“Any other speculation about the euro zone is absolutely groundless and irresponsible,” the prime minister said, insisting that all of the countries using the common currency, including Spain and Portugal, are strong enough to stabilize their public finances and return to the path of economic growth.
Hours after Zapatero spoke in Brussels, the IMF denied that Spain had sought international aid.
“There is no truth in those rumors,” IMF spokesman Bill Murray said in Washington. EFE
Story from Latin American Herald Tribune
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