Newsdeck

Spain’s PM expects ‘reasonable’ terms for any new aid

By Reuters 11 September 2012

Spanish Prime Minister Mariano Rajoy said on Monday he expected the European Union to set reasonable conditions for Spain if the country sought a bailout, saying he should not be told exactly where to trim public spending and would not cut pensions.

Spain has already received aid of up to 100 billion euros ($127.86 billion) from the euro zone to help it shore up its ailing banks and has made it clear it could seek a sovereign rescue once euro zone partners and the European Central Bank spell out what strings would be attached.

“I am absolutely convinced that everyone will be reasonable but I insist that we haven’t taken a decision,” Rajoy told Spanish state television in his first TV interview since winning power more than nine months ago.

No decision on a bailout would be taken ahead of the Sept. 14-15 meetings of euro zone and EU finance ministers, he added.

ECB President Mario Draghi on Thursday unveiled details of an unlimited bond-buying programme to ease the rates being paid by Spain and Italy for their sovereign debt.

But he said the bank would only act after a request to the euro zone rescue fund, something that would come with strict conditions.

“I will look at the conditions. I would not like, and I could not accept, being told which were the concrete policies where we had to cut,” Rajoy said.

Rajoy has raised income tax and value-added tax and pushed through billions of euros of austerity cuts, including in public services like education and health, but has not cut pensions. Pensions would not be scaled back in the 2013 budget, he promised.

“The first instruction I gave to the finance minister who is drawing up the budget is that the people it shouldn’t affect are the pensioners,” he said.

Despite reneging on his election campaign promise not to raise taxes, Rajoy ruled out a vote of no confidence, saying his measures were essential for the country to meet its deficit targets. DM

Photo: Spain PM Rajoy. (Reuters)

Gallery

While we have your attention...

An increasingly rare commodity, quality independent journalism costs money - though not nearly as much as its absence.

Every article, every day, is our contribution to Defending Truth in South Africa. If you would like to join us on this mission, you could do much worse than support Daily Maverick's quest by becoming a Maverick Insider.

Click here to become a Maverick Insider and get a closer look at the Truth.


Newsflash

Zondo deals Lynne Brown a sucker punch: ‘Does she deny working with the Guptas?’

By Jessica Bezuidenhout

Towns near Fukushima are now being plagued by hordes of rampaging radioactive wild boars. Where are Asterix and Obelix when you need them?