Spain considers using ECB bond-buying scheme | Business| Economy and finance news from a German perspective | DW | 12.09.2012
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Business

Spain considers using ECB bond-buying scheme

Spain's Prime Minister Mariano Rajoy is 'weighing up' the benefits of bond purchases by the European Central Bank (ECB). The leader's ultimate aim is to lower his country's borrowing costs.

The Spanish Prime Minister Mariano Rajoy has "completely" ruled out that his government would seek a bailout package for the whole country.

However, in comments published in the Finnish daily "Helsingin Sanomat" on Wednesday, Rajoy said that he was studying the price his government would have to pay for seeking help from the ECB's bond-buying program.

"In addition to growth, the only option I'm considering is using the central bank's announced mechanism," the newspaper quoted Rajoy as saying.

Last week, the ECB decided to buy unlimited amounts of sovereign debt from struggling eurozone countries under the condition that they first seek bailout funding from the eurozone rescue fund. The aim is to lower borrowing costs for those countries.

Spain already received rescue funding to the tune of 100 billion euros ($128.5 billion) to shore up its troubled banks and its heavily-indebted regions.

In his comments, Rajoy indicated that the ECB might be spurred into action after Spain had applied for a so-called precautionary assistance program from the eurozone rescue fund.

In contrast to a full sovereign bailout, granted for example to Greece and Portugal, such a program would entail lighter conditions for Spain and lower costs for the rescue fund.

Currently considering the "strings" attached to the move, Rajoy said that he would not be told what to do with the budget.

"I'm prepared to decrease the deficit, but others cannot decide how it will be reduced," he told the Finnish newspaper, referring to outside monitors from the International Monetary Fund (IMF) and the EU.

uhe/sej (dpa, Reuters, AP)