Spain Hinting At Requesting InterventionOctober 16, 2012 @ 8:08 AM EST
Spain Hinting At Intervention Request
Both the WSJ and FT have reports out this morning discussing the latest developments surrounding a potential intervention request from Spain.
Both articles reference comments from an unnamed senior Finance Ministry official who said that Madrid is considering requesting a credit line, rather than a full-scale bailout from the ESM, which appears to be a preferred approach.
According to the reports, the Finance Ministry official added that such a move would qualify Spain for the ECB's bond-buying program.
The official offered the opinion that interest rates on Spanish debt could fall by 150 basis points following his country’s request for aid and that the Spanish stock market could surge 15%.
An important part of this story is the expectations that the EU would not impose any new austerity conditions beyond the steps that Spain is currently taking on its own.
According to the FT, European officials are divided over what the impact would be for Italy. Recall that it has also been reported that Germany would like Spain to delay an intervention request so that it can bundle support packages for Greece, Cyprus and Madrid together in an effort to minimize the political backlash in Gemany.
Recall that stories were out yesterday stating that Spain would likely ask for aid in November.
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