Wednesday, 12 September 2012 22:55
MADRID: Spain said Monday it must watch how its borrowing costs evolve before deciding whether to seek a full-blown bailout, and warned the financial crisis threatens welfare benefits.
Spain has been widely expected to seek a rescue from the European Central Bank, which has offered to buy government bonds of states that accept strict conditions.
But easing borrowing costs since the ECB revealed its plans on September 6 have led to speculation that Madrid may try to avoid a rescue altogether, a strategy some analysts say is risky.
"I still don't know the conditions nor whether it is necessary for Spain to request it," Rajoy told parliament when asked about the conservative Popular Party government's plans for a bailout.
"We will see how the risk premium develops and the financing differentials ahead," he said, referring to the extra rate charged on Spanish bonds compared to safe-haven German ones, a key measure of financial confidence.