Arab Today, arab today spain pushing for bank aid berlin holding back
Last Updated : GMT 22:39:58
Arab Today, arab today
Arab Today, arab today

Spain pushing for bank aid, Berlin holding back

Arab Today, arab today

Arab Today, arab today Spain pushing for bank aid, Berlin holding back

Rome - ANSA

Clamour is growing from Spain for the country\'s banks to be granted access to a direct loan from Europe without having to ask for a bailout. Berlin is holding back on the move, however, while the demands will feature in a conference call between G7 ministers due to take place later. Signs of flight from current account holders in Spanish banks, together with intense pressure from Washington and the International Monetary Fund (IMF) have caused the situation to accelerate. In Europe, contacts are ongoing over a process that might lead to European supervision of the banks, which would justify the direct intervention of the European rescue fund and Europea insurance of bank deposits. The issue is worrying partners outside of Europe to such an extent that G7 Finance Ministers will discuss the matter today over the phone, amid particular concern for the situation faced by \"certain banks\". The US, in particular, wants to clarify the means of European intervention ahead of the meeting of G20 heads of state and of government, which will be held in Mexico in June, shortly before the EU Council at the end of the month, which could prove decisive for the European response. After the readiness shown by the European Commission, the European Central Bank and a number of countries including Italy, France is the latest to announce that it is \"in favour of the banking union\" and of the direct recapitalisation of banks by the European Stability Mechanism (ESM), according to the Finance Minister, Pierre Moscovici. Naturally, pressure is also coming from the banks themselves. Emilio Botin, the chairman of Santander, has said that a direct loan of 40 million euros would be enough for Spanish banks. But the situation in Spain, where a number of savings banks are on the edge of the precipice, means that there is not enough time. The Prime Minister, Mariano Rajoy, openly demanded a European \"banking union\" three days ago. The problem is that the ESM treaty, which comes into force from July, does not include direct access for banks but rather activation by the state, which in asking for assistance from the EU and IMF would handover to the institutions the supervision of a programme of reforms that would condition the terms of the loan. For this reason, Spain is working with European technocrats so that the treaty can be interpreted flexibly, allowing the country to gain access to aid for banks without having to accept the \"stigma\" of an EU-IMF programme. Berlin is well aware that the timeframe for a handover of power to the centralised system, which it believes is an unavoidable counterbalance for the permanent sharing of national economic resources today, is by some distance longer than the rapid response expected from Spanish banks. As a result, Berlin is holding back. \"It is up to national governments to decide whether to resort to the bailout mechanism, with all that this brings. This is also the case for Spain,\" the German government spokesperson, Steffen Seibert, said in Madrid. So with markets ready to gamble on a bailout, attention is once again focussed on the ECB. Since Wednesday\'s executive council, most economists are not expecting a cut in rates despite demands from a number of politicians. Mario Draghi\'s comments, however, could provide fundamental clues towards the ECBs readiness to put out potential fires. The ECB could in future consider a new monetary slowing, with the idea of a massive three-year loan for the banks not completely ruled out. German resistance, however, means that the resumption of a purchase programme of state bonds, which was abandoned exactly three months ago, is almost certainly off the agenda. (ANSAmed).

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Arab Today, arab today spain pushing for bank aid berlin holding back Arab Today, arab today spain pushing for bank aid berlin holding back

 



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