Spain’s Economy Minister Luis de Guindos has insisted that his nation “doesn’t need a bailout” despite calls from European Central Bank President Mario Draghi to take up a bond purchase plan.
Speaking during a lecture at the London School of Economics on Thursday, de Guindos said that the Spanish government was already carrying out the policies that the ECB would demand in return for buying its bonds; while expressing confidence that the country could attract enough investors on its own to take up the nation’s debt.
"There is a little bit of misunderstanding…Spain doesn't need a bailout at all," said de Guindos, as cited by the Wall Street Journal.
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At its last policy meeting on September 6, the ECB had promised to buy unlimited amounts of government bonds to help lower borrowing costs for countries such as Spain or Italy. But in order to get help from the ECB, a country must first voluntarily ask for assistance by approaching the bloc's emergency fund, the European Stability Mechanism, and agree to tight spending and reform measures.
Draghi told a news conference in Brdo Pri Kranju, Slovenia, on Thursday that it was now up to Spain to decide whether they wanted help at all.
In a direct nudge towards Spain, Draghi added that while the country was making “significant progress” in addressing its problems, the ECB was willing to offer a rescue package that “need not necessarily be punitive.”
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“We’re back at this game of brinkmanship between the ECB and governments again, and it’s a case of who makes some concessions first,” said Nick Matthews, a senior European economist at Nomura International Plc in London, to Bloomberg.