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Spanish PM Attempts to Send ‘Message of Calm’ |
4 June 2012Prime Minister Mariano Rajoy sought to reassure Spain on June 2 that the country would eventually exit the financial crisis, after a dismal week that saw its borrowing costs soar.
Speaking at an economic forum in Sitges in eastern Spain, Rajoy said he was sending a “message of calm” as fears mount that Spain will need an international rescue to pay its bills.
“Spain is a very solid country, although right now, no one seems to remember this,” he said.
Doubts about Spain’s solvency rocked global markets this week and saw the interest rate on 10-year government bonds hit a record 5.48 percentage points on Friday, as Spanish markets slumped to lows not seen since April 2003.
The country “will get through the storm through its own efforts and with the support of our European partners,” the prime minister added.
“Because what’s at stake isn’t just the economic future of Spain but the very future of European monetary union.” Rajoy’s message comes after the Spanish budget minister and other officials on Friday took a similar tack, telling reporters the government was confident of the country’s solvency.
Spain is Europe’s fourth-largest economy and has been battered by a real estate crash and record unemployment of about 25 percent.
Plunging Housing Values
Plunging housing values saw private and banking assets drop and eradicated a source of plentiful income for the Spanish regions.
Spanish bank Bankia has asked the state for 19 billion euros ($24 billion) to repair its books, in addition to 4.5 billion euros already injected, the biggest rescue in Spanish banking history. But Rajoy said “I have no doubts about the vast majority of financial institutions in Spain.” |
4 June 2012
HDN
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