Europa Press news agency informed on Tuesday that the Spanish President Mariano Rajoy assured speaking overnight in Madrid that he does not plan to ask for EU rescue funds in the nearest future.
Meanwhile, Spanish unemployment data for September, released today by the Spanish government was rather pessimistic, showing an increase in the number of unemployed workers to 79.645, which raises the total jobless number to 4.705.279.
Spain ready to ask for bailout, but Germany opposes - Reuters
Headlines are hitting the wires late in the US session that Spain is finally prepare to bite the bullet and request a Euro zone bailout this coming weekend, however, the possible request is facing opposition from Germany now, recommending the Iberian country to hold out any external aid, according to unnamed European officials cited by Reuters.
From Reuters: " 'The Spanish were a bit hesitant but now they are ready to request aid,' a senior European source said. Three other euro zone senior euro zone sources confirmed the shift in the Spanish position, all speaking on condition of anonymity because they were not authorised to discuss the matter."
German Finance Minister Wolfgang Schaeuble remains confident Spain has introduced enough belt-tightening measures to improve 'the state of affairs' of its sinking economy - despite is expected to generate zero to negative growth for the next 5-10 years according to Egan Jones rating agency - to no longer depend on a bailout, an assumption hard to believe.
To put it plainly, Chancellor Angela Merkel and her ministerial colleagues are afraid to ask the national parliament for more financial back-up toward other indebted nations. Especially, after German decision-makers are till digesting the approved 100 billion euros to help Spanish banks in July.
Reuters adds, quoting a senior German source: "It doesn't make sense to send looming decisions on Greece, Cyprus and possibly also Spain to the Bundestag one by one. Bundling these together makes sense, due to the substance and also politically."
Part of Greek 2013 draft budget questioned by Troika inspectors
The draft plan of austerity measures for 2013, presented by the Greek government on Monday and consisting of 10.5 billion euros in spending cuts and 3 billion euros in tax increases, has not been fully accepted by the Troika inspectors. After holding talks with Finance Minister Yannis Stournaras the EU, ECB and IMF representatives still had reservations about 2 billion euros of the proposed measures.
The budget for 2013 projects a deficit of 6.6% GDP for 2012 and 4.2% for 2013. Greece is supposed to attain a primary surplus before debt servicing of 1.1% GDP in 2013. Still, it is expected that the economy will contract by 6.5% this year and by 3.8% in 2013. Unemployment should rise slightly from 24.4% in 2012 to 24.7% in 2013.
The EU, ECB and IMF inspectors will meet with Greek PM Antonis Samaras at 16:00 GMT to discuss the situation further.
Rehn: EU satisfied with progress in Spanish bank recap
European Commissioner for Economic and Monetary Affairs Olli Rehn met with Spanish President Mariano Rajoy and Spanish economy minister Luis de Guindos in Madrid on Monday in order to discuss the country's economic situation in the light of the new budget cuts announced last Friday by the Spanish government.
Olli Rehn praised Spain's consistency in introducing budget cuts in order to lower the budget deficit and said that he can already see an improvement, but that the program of ambitious reforms must be continued in order to obtain lasting effects. He expressed his satisfaction with the results of Spanish bank stress tests, which revealed that the country will need less capital to rescue its banking sector than the initially calculated 100 billion euros.
The European Commissioner for Economic and Monetary Affairs also assured that the EU is prepared to act in case Spain decides to submit a request for a bailout.
Spanish 10-year bond yields declined further to 5.89% on the news.
