Brussels, 06/06/2012 (Agence Europe) - Spanish Economy Minister Luis De Guindos said on Wednesday 6 June 2012 that the Spanish government hd not discussed aid for Spanish banks at all, despite the banks' problems due to the collapse of the property market and the economic recession, explains Spanish newspaper El País. The Spanish government is awaiting the outcome of a bank audit commissioned from Germany's Roland Berger and Oliver Wyman of the EU before making any decision. The audit results are expected at some point in the next fortnight.
EU Internal Market Commissioner Michel Barnier said a detailed diagnosis was required, while a spokesman for Euro Commissioner Olli Rehn said vulnerabilities needed to be looked into, along with the need for restructuring and, if necessary, recapitalisation, which is a necessary precondition for any talks at EU level.
Meanwhile, Brussels is reported to be looking at ways of supporting Spain's banks without requiring Spain to introduce a structural adjustment programme or seek international aid. The European Financial Stability Fund (EFSF) and the European Stability Mechanism (ESM), the two European bailout funds, are not yet able to directly aid struggling banks, but Barnier says that this should be seriously examined for the future. After the ECB Governing Council meeting on Wednesday (see separate article), the head of its monetary institute, Mario Draghi, set out the pros and cons. Direct aid from the EMS for Spanish banks would help them recapitalise without expanding Spain's debt, but did people really want the EMS to become a bank shareholder? If so, the EMS treaty would have to be amended. France is in favour, but not Germany, which says that any international aid must have strong strings attached.
Madrid will see on Thursday whether it can roll over its medium and long-term debt unaided on the money markets, two days after Spanish Enterprise Minister Cristóbal Montoro said that Spain could not raise cash on the market and Spanish Prime Minister Mariano Rajoy repeated his call for a European budget union and more determined aid from the ECB for struggling countries. (MB/transl.fl)