Spain's Rajoy says considering ECB bond programme

HELSINKI: Spain is considering seeking help from the European Central Bank's bond-buying programme but is not planning a full sovereign bailout, Prime Minister Mariano Rajoy was quoted as saying on Wednesday in Finnish newspapers.
He
also said he had no objection to the International Monetary Fund
monitoring Spanish compliance with the conditions for any assistance.
"The
IMF is already monitoring our economy," Helsingin Sanomat quoted Rajoy
as saying in an interview during a visit to Madrid by Finnish Prime Minister Jyrki Katainen on Tuesday.
The
ECB agreed last week to launch a new bond-buying programme to reduce
struggling euro zone countries' borrowing costs provided they request
assistance from the euro zone's rescue fund and abide by strict
conditions.
Spain, which has already secured European rescue
funds of up to 100 billion euros ($128.5 billion) for its troubled
banks, is also struggling with its fiscal deficit and pressure from
credit rating agencies.
"In addition to growth, the only option
I am considering is using the central bank's announced mechanism,"
Rajoy said, according to Helsingin Sanomat.
"It is completely ruled out that we would ask for a bailout for the whole country," he told business daily Kauppalehti.
His
comments indicated Spain may apply for a precautionary assistance
programme under which the euro zone's rescue funds could buy Spanish
bonds at issue without the country being taken off the credit markets,
rather than the kind of full sovereign bailout granted to Greece,
Portugal and Ireland.
The conditions on a precautionary
programme would be lighter, and the cost to the rescue funds of
supporting the euro zone's number four economy would be lower.
Rajoy
repeated that his government would carefully study the strings attached
to the ECB's bond programme, but added he would not be told what to do
with the budget.
"I am prepared to decrease the deficit. But others cannot decide how it will be reduced," he said.
Rajoy
said in a television interview on Monday he would not touch pensions,
although many economists believe reducing unsustainable pension costs
would be a likely condition for any assistance programme. - Reuters