Spain's Prime Minister Mariano Rajoy would ask Germany's backing for a bailout before asking the EU for one, Reuters reported on Tuesday. Rajoy's will seek for German Chancellor Angela Merkel support on Thursday when two leaders are expected to meet.
"The worst thing that could happen is Spain asks for aid and Germany blocks it," said a senior European diplomat cited by Reuters.
Meanwhile, French president Francois Hollande commented after his meeting with Italian Prime Minister Mario Monti that the "June summit decisions' must be implemented" and the next October summit ought to do further steps.
Hollande said that Mario Monti also share his "concerns on growth and stability" while he pointed that "competitiveness doesn't mean austerity." The Frech president affirmed that "EU governments should intervene in bond markets with the ECB" help and throught the "Stability mechanism."
Regarding Greece, Hollande affirmed that the Hellenic country "should get more time if Troika approves efforts" but, "Greece must be allowed to remain in Euro Zone."
Continuing with Greece, German Finance Minister Wolfgang Schaeuble said later on Tuesday that Greece can’t expect third bailout. Firstly, the Hellenic country must fully implement agreed measures in order to receive further aid.
In a short written statement after a meeting with his Greek counterpart, Giannis Stournaras in Berlin, Schaeuble said the most important thing is that "Greece must fully implement its obligations".
Schaeuble reiterated that based on a Troika's report that will be ready in October, the Eurogroup and the IMF will decide whether Greece is eligible to receive its next tranche of a bailout worth €31.5 billion.
Finally, Schaeuble says that "expanding Greece’s bailout isn’t possible."
Spain to inject bonds, not cash, into BankiaSpain's bank rescue fund, known as FROB, will inject government bonds, not cash, into troubled Bankia to recapitalize the nationalized lender as it awaits European bailout funds.
Last week, FROB announced it would inject capital immediately which was described an "advance on European aid" although the agency declined to divulge the amount.
Spain is bolstering Bankia group after it reported a €4.44 billion net loss in first half of 2012. Bankia requested in May €19 billion in state aid following a €4.5 billion bailout in 2010.