Spain considers ‘sovereign bailout’ request, EU’s Rehn says

PanARMENIAN.Net - Spain’s government is considering a request for a sovereign bailout, European Economic and Monetary Affairs Commissioner Olli Rehn signaled.

“The Spanish government has an open mind on this issue, but no decision has been made,” Rehn said in New York yesterday, August 14. “We stand ready to act if there is a request.”

Rehn’s remarks came after Prime Minister Mariano Rajoy said he would ask the European Central Bank to buy Spanish bonds “if it seems reasonable,” as he moved to extend unemployment subsidies for some of the nation’s 5.7 million jobless.

Rajoy’s only criterion will be “defending the general interests of Spaniards,” the premier told reporters yesterday in Palma de Mallorca after meeting King Juan Carlos. The day before an extraordinary jobless subsidy was set to expire, Rajoy said the government will extend payments for another six months amid a jobless rate of 25 percent.

Spanish 10-year bond yields rose to a euro-era high of 7.62 percent on July 24, exceeding the threshold that prompted full sovereign bailouts in Greece, Portugal and Ireland. Yields have fallen since ECB President Mario Draghi said on Aug. 2 that the bank would buy sovereign bonds if countries applied for similar support from Europe’s rescue fund and accepted strict conditions in return, Bloomberg reported.