Europe Update: Spain, Italy in No Rush to Request AidAugust 6, 2012 @ 8:38 AM EST
Europe Update: The Latest on Spain and Italy
Apparently both Spain and Italy are in no rush to request aid from the EU or the EFSF and feel comfortable in waiting until more details about the strings attached to aid are available. Recall that part of the rationale behind Friday’s stock market rally was tied to the idea that Spain would soon formally request bailout assistance and thus put an end to the uncertainty in the global banking system.
Spain said over the weekend that there is no need to ask for help at this moment. Dow Jones reported that according to Spanish Economy Minister Luis de Guindos, Spain is in no rush to request a European bailout and can afford to wait until more details surface on the conditions tied to the support. De Guindos pointed out that Madrid has covered 70% of its 2012 financing needs and expects to wait until the ECB lays out the details of its new program to help bring down peripheral funding costs before requesting aid.
As for Italy, Reuters reported that Bank of Italy Governor Ignazio Visco and Cabinet Undersecretary Antonio Catricala said on Sunday that Italy does not need to ask the Eurozone's bailout mechanism to buy its government bonds to bring down borrowing costs. Visco told reporters that the potential for a support request in the future will depend largely on Italy's budget and reform efforts. Catricala also told Corriere della Sera that Italy will not ask for support before a request comes from Spain, which is under more intense pressure from the bond market.
Finally, Bloomberg is reporting that French President Hollande is pushing Spanish Prime Minister Rajoy and Italian Prime Minister Monti to request support from the Eurozone's bailout mechanism. The report indicates that Hollande's strategy is designed to help protect France from market speculation.
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Other stories on Europe to review:
Draghi Fails to Deliver
ECB Leaves Rates Unchanged
Eurozone PMI's Confirm Ongoing Contraction
ECB To Do 'Whatever It Takes' to Save Euro
Spain Enters Recession in Q2
Industrial Production Down -2.8%
EU to Jumpstart Loans to Spanish Banks
Germany's Industrial Production Up in June
Bank of England Launches 3rd Round of QE
- EU Leaders Announce Measures To Ease Crisis
iShares Spain - Last 12 Month
iShares Italy - Last 12 Month
iShares France - Last 12 Month
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