Jaime Garcia-Lehaz, a deputy minister in Luis de Guindos's economy ministry, said on Friday: "They [the ECB] should step up the purchase of bonds" after the cost of insuring Spain's bonds against default surged to record levels.
Mr Garcia-Legaz added: "If you're demanding ultra-restrictive fiscal policies from Spain and Italy then it makes sense to have monetary policy with stronger bond purchases."
His comments came as ECB officials divided over the best course of action to quell the Spanish economic crisis after new data revealed Spanish bank borrowing from the European Central Bank doubled in March.
While executive board member Benoit Coeure signalled the bank may start buying Spanish bonds, his Dutch colleague Klaas Knot said yesterday that the ECB is "very far" from reactivating a policy that failed to stop a sell-off in Spanish bonds in November.
The clear need for emergency funding triggered renewed turmoil in the financial markets on Friday.
Prime Minister Mariano Rajoy is struggling to convince investors he can get Spain's finances under control after last month refusing to meet deficit targets set by the European Commission and the previous Government.
While Rajoy asserted on April 12 Spain won't need a rescue, credit-default swaps rose 17 basis points to 498 yesterday, surpassing the all-time high closing price of 493.
The Bank of Spain confirmed the country's biggest institutions borrowed €316.3bn (£260.9bn) from the ECB in March, almost twice the €169.8bn in February.
In reaction traders dumped Spanish stocks and bought insurance against Madrid defaulting, convinced the data showed that the banks are now almost shut out of international credit markets.
telegraph.co.uk
Mr Garcia-Legaz added: "If you're demanding ultra-restrictive fiscal policies from Spain and Italy then it makes sense to have monetary policy with stronger bond purchases."
His comments came as ECB officials divided over the best course of action to quell the Spanish economic crisis after new data revealed Spanish bank borrowing from the European Central Bank doubled in March.
While executive board member Benoit Coeure signalled the bank may start buying Spanish bonds, his Dutch colleague Klaas Knot said yesterday that the ECB is "very far" from reactivating a policy that failed to stop a sell-off in Spanish bonds in November.
The clear need for emergency funding triggered renewed turmoil in the financial markets on Friday.
Prime Minister Mariano Rajoy is struggling to convince investors he can get Spain's finances under control after last month refusing to meet deficit targets set by the European Commission and the previous Government.
While Rajoy asserted on April 12 Spain won't need a rescue, credit-default swaps rose 17 basis points to 498 yesterday, surpassing the all-time high closing price of 493.
The Bank of Spain confirmed the country's biggest institutions borrowed €316.3bn (£260.9bn) from the ECB in March, almost twice the €169.8bn in February.
In reaction traders dumped Spanish stocks and bought insurance against Madrid defaulting, convinced the data showed that the banks are now almost shut out of international credit markets.
telegraph.co.uk
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