IMF begins talks on Spain bailout


FXstreet.com (Córdoba) - After the IMF spokeman Gerry Rice said Thursday that the fund wasn't drafting any plans for a Spanish bailout nor has Spain requested any financial support from the IMF, media reports emerged during the American afternoon saying the International Monetary Fund has started talks with Spain for a loan in case the nation fails to find funds to bailout Bankia.

Citing people involved in the handling of the Spanish crisis, the WSJ reported "Both the European Union and IMF want to avoid having to bail out Spain at all costs, the people said, but early planning is under way given that the country is struggling to raise a €10 billion ($12.4 billion) shortfall in funds to bail out Bankia".

According to the article, the actual size of any potential bailout would be discussed after the IMF's review of Spain, which starts next Monday Jun 4, and would be calculated based financial needs like outstanding bond redemptions and budget deficit forecasts, but the bailout would only be considered if the Spanish government fails to find any other way to recapitalize its banks.

"Some say a Spanish bailout is inconceivable, but it's equally inconceivable that preparations are not being made for such an eventuality," the cited source said.

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