(MENAFN - Saudi Press Agency) Spanish Finance Minister Luis de Guindos said Monday during talks with members of the European Parliament that
Spain did not need a full bailout, dpa reported.
'At the moment, as in the past, the Spanish government is
financed,' de Guindos told the parliament's economic and monetary affairs committee.
'I think that everybody pretty much agrees that Spain is doing what it has to do in terms of meeting its obligations, meeting the conditions arising from (its excessive deficit),' he said.
Spain has been granted a banking bailout of up to 100 billion
euros (127 billion dollars), of which the country would need up to about 40 billion euros, de Guindos confirmed.
He said that about 90 per cent of this would go to the four banks
already being monitored by the bank restructuring fund FROB, while 70
per cent of the country's financial sector was healthy and solvent.
A so-called bad bank would be up and running by December 1 to hold
toxic assets, de Guindos added.
He praised the European Central Bank's (ECB) new unlimited
bond-buying programme, which confirmed the bank's 'commitment to the
euro,' and said its mere announcement had 'mitigated considerably'
the problems of troubled eurozone members such as Spain.
De Guindos defended Madrid's economic projections, which are more
optimistic than those of the European Commission.
'I believe - and it's my duty to defend this - that the Spanish
government's forecast is based on reform and on specific actions,' he
The EU's executive expects Spain's deficit to reach 8 per cent
this year, compared to Madrid's forecast of 7.3 per cent.
De Guindos predicted that 2012 gross domestic product would fall
by 1.5 per cent - an improvement of 0.2 per cent on previous
The minister outlined Spain's 'brave and consistent' measures to
generate growth and jobs as well as meeting European objectives in
the last 11 months, but stressed that faith in the euro currency was
key to the country's recovery.
'Spain's economic recovery is going to be very difficult or
impossible until the doubts about the future of the euro are cleared
up,' he said.
'We are paying for an extra spread in our interest rates, and it
could be somewhere around 200 base points,' he said, adding that the
ECB had confirmed these figures. A drop of 100 base points would
improve GDP by 0.5 per cent, he added.
'According to the ECB, Spanish small and medium enterprises are
paying twice as much as Germany's for their debt,' he said, calling
'European institutions need to show an iron determination to move
towards more banking, fiscal and economic integration, that's the
only way for Europe to come strengthened out of this crisis,' de