From El Pais (Google translation)
Rajoy denies that the bank rescue to impose conditions on the economy
The president avoids triumphalism and ensures that the agreements of the EU summit has strengthened the euro
Mariano Rajoy has learned the lesson. Following the European Council which has garnered the most international success so far, the Spanish prime minister has been more cautious than ever. If the June 10, after the Eurogroup approve the rescue of Spanish banks, boasted of having put pressure on their partners , today denied the existence of pressure, although with Italian Prime Minister, Mario Monti, blocked Thursday afternoon the approval of the plan for growth in the amount of 120,000 million to be given to stabilizing the financial markets. Rajoy has good reason to be cautious. His previous acts of arrogance angered his partners and, in addition, there are still too many loose ends to tie before declaring victory. Although the Spanish prime minister insisted on repeating that there will be strict conditions on the agreement reached on Thursday, as ECB President, Mario Draghi, the presidents of the European Commission Jose Manuel Durao Barroso and European Council, Hermann Van Rompuy reiterated in speeches that will be.
Therefore, in the press conference has been offered at the end of the European summit, Rajoy has insisted that it is a European triumph, rather than Spanish. ”The Council has launched a clear political signal,” he said, refusing to go into detail, arguing that “the most important is that the agreement strengthens the position of the euro , which today is stronger and more credible than yesterday, other minor issue. ”
But it is not irrelevant issues. The president has said that the agreement to recapitalize Spanish banks, currently under negotiation, “there is macroeconomic conditions” affecting the whole economy. However, the agreed text early this morning by the leaders of the 17 euro countries are said to aid the financial sector, amounting to 100,000 million, will include “the appropriate conditionality”, at the individual entity of each sector “or throughout the entire economy.” Both the European Central Bank President (ECB) and German Chancellor Angela Merkel have stressed the importance of these conditions are met.
Once the ECB supervisor assumes the status of single European banking system, the rescue of Spanish banks from the current European Financial Stability Fund (EFSF) to the new European Stability Mechanism (MEDE), and in that time, no will require that the Spanish state, through the Bank Restructuring Fund (FROB), is involved as an intermediary and guarantor, thus breaking the vicious circle that links the public debt with the banks. Rajoy has been assumed that this change will occur before the year ends, but the Eurogroup agreement only says that the European Council will consider it within that period, without venturing a date for its implementation. What has become clear is that the MEDE not have the priority creditor status, a requirement that had scared off potential investors, since relegated time to collect their debts.
Although the agreement allows for use “in a flexible and efficient” two European bailout funds-the provisional and the final-to stabilize financial markets by buying Spanish and Italian debt to halt the escalation in the risk premium , Rajoy ruled out recourse to this instrument. ”We did not consider anything in this regard,” he assured. The truth is that it is in this chapter that has had its greatest setback. The Spanish prime minister supported the proposal of the Italian Prime Minister for the fund to intervene in the secondary market debt whenever the risk premium exceeds a certain level, without carry macroeconomic conditions attached. The agreement, however, makes the intervention of the fund to implement the recommendations of the European Commission and the commitments made by each country and notes that these requirements should be reflected in a Memorandum of Understanding, which is a rescue plan in all rule.
Maybe that’s why Rajoy has not even want to venture that the European Council agreement will relieve the pressure on Spanish debt, which this morning has begun to reposition themselves relaxing then on the threshold of 500 points. ”To me the concern now is to try to do things right,” he responded.
While denying that there are macroeconomic requirements, Rajoy has made clear that the Government will continue its fiscal consolidation program, consolidation of public finances and structural reforms. And not just for “the commitments made with partners” in Europe, but also because it responds to “deep convictions”. Rajoy has even refused to rule that before approving vacation one to rise in VAT , in line with the amount claimed by the European Commission. ”If we take a stand, do not worry that you will know,” he replied wryly.