Rajoy says €100bn aid package will stabilise euro zone
IN HIS first public comments since his government requested a bailout of its banking sector, Spanish prime minister Mariano Rajoy said the decision would help to stabilise the euro zone and smooth his own country’s return to growth.
“The credibility of the European project has benefited, so have the future of the euro and the solidity of our [Spain’s] financial system, so that credit starts flowing again,” Mr Rajoy said in Madrid yesterday.
On Saturday, Mr Rajoy’s economy minister, Luis De Guindos, confirmed that Spain had accepted a rescue deal from the European Union for its struggling banks worth up to €100 billion.
The prime minister echoed Mr De Guindos’s insistence that the package did not constitute a “bailout”, perhaps mindful of the political stigma attached to the label.
“If we hadn’t done our homework [on Saturday], an intervention of the kingdom of Spain would have been on the table rather than a credit line,” Mr Rajoy said.
He added it was he who had pressed for the package to be approved, rather than other European nations or institutions.
The prime minister made his comments shortly before flying to Poland to watch Spain play Italy in the European soccer championship. The fact he did not make a statement on Saturday, leaving his economy minister to announce the loan, has been heavily criticised in some quarters. “What nobody can understand, even his own people, is why Rajoy doesn’t show his face,” newspaper El País said.
The Spanish government is keen to highlight the difference between the assistance Spain will receive and that already given to Greece, Ireland and Portugal with their bailout deals.
According to Madrid, the Spanish rescue will focus exclusively on the banking sector, which has been thrown into crisis by the bad loans on its books, a legacy of the country’s burst real estate bubble.
Mr De Guindos has said any new conditions imposed by the EU will be related to the financial system rather than the broader economy. Spain is already implementing a severe austerity programme in an attempt to slash its deficit in line with EU targets.
The Confederation of Basque Businesses, representing about 13,000 private companies, welcomed the news of a new credit line for the Spanish economy, which has fallen back into recession this year, calling the rescue “the best of the existing options”.
However, while Mr Rajoy’s conservative Partido Popular dominates congress with a majority, opposition politicians have undermined the government’s claim that this is neither a bailout nor a deal that will imply further austerity. “This is an intervention in every possible way,” said Gaspar Llamazares of the United Left coalition, who added that the loan “is an affront to the country’s sovereignty and a mockery of Spaniards’ democratic representation that will lead to spending cuts of every kind”. The main opposition Socialist Party also contradicted the government’s version of events, saying the announcement had damaged Spain’s image.
“The government would have us believe that we’ve won the lottery, that Fr Christmas has come,” said Socialist Party leader Alfredo Pérez Rubalcaba. “The rescue affects the image of our country.”