BRUSSELS: Spain edged closer on Wednesday to asking for bailout aid after months of hesitation on the eve of a summit where European Union leaders aim to strengthen the bloc's shaky foundations.
An EU diplomatic source told a news agency that "things are evolving" and that if Madrid does not ask for help at Thursday and Friday's summit in Brussels, it could do so as early as next week.
This would be the first use of the eurozone's new rescue fund, the European Stability Mechanism (ESM) and would in turn allow the European Central Bank to intervene on the markets, pushing down borrowing costs for Madrid.
The net effect would be to set in motion measures agreed at a June summit to bolster the bloc with a new rescue system plus tighter economic and fiscal policy coordination - issues to be discussed further at the meeting on Thursday and Friday.
Spanish Prime Minister Mariano Rajoy could use the summit to "make explicit the conditions that would be imposed in exchange for aid" over and above those agreed in June to help Spain's battered banks, the diplomatic source said.
French President Francois Hollande meanwhile said the end of the eurozone debt crisis, which has likely driven the bloc into recession, was close.
"On the exit from the eurozone crisis, we are close, very close ... because we took the right decisions at the summit of June 28-29 and because it is now our duty to apply them rapidly," Hollande said in an interview.
If the end was in sight, the EU still had to ensure that countries which had made painful efforts to reform their finances were rewarded with lower interest rates, he said, referring to Greece and Spain.
He also stressed the need to make progress toward a single European bank regulator by the year-end deadline agreed in June and toward greater shared decision-making.
The pressure on Spain eased considerably Wednesday on the reports of a possible aid request and a decision by Moody's rating agency not to downgrade the country's Baa3 assessment, leaving it one step above "junk" grade.
indiatimes.com
An EU diplomatic source told a news agency that "things are evolving" and that if Madrid does not ask for help at Thursday and Friday's summit in Brussels, it could do so as early as next week.
This would be the first use of the eurozone's new rescue fund, the European Stability Mechanism (ESM) and would in turn allow the European Central Bank to intervene on the markets, pushing down borrowing costs for Madrid.
The net effect would be to set in motion measures agreed at a June summit to bolster the bloc with a new rescue system plus tighter economic and fiscal policy coordination - issues to be discussed further at the meeting on Thursday and Friday.
Spanish Prime Minister Mariano Rajoy could use the summit to "make explicit the conditions that would be imposed in exchange for aid" over and above those agreed in June to help Spain's battered banks, the diplomatic source said.
French President Francois Hollande meanwhile said the end of the eurozone debt crisis, which has likely driven the bloc into recession, was close.
"On the exit from the eurozone crisis, we are close, very close ... because we took the right decisions at the summit of June 28-29 and because it is now our duty to apply them rapidly," Hollande said in an interview.
If the end was in sight, the EU still had to ensure that countries which had made painful efforts to reform their finances were rewarded with lower interest rates, he said, referring to Greece and Spain.
He also stressed the need to make progress toward a single European bank regulator by the year-end deadline agreed in June and toward greater shared decision-making.
The pressure on Spain eased considerably Wednesday on the reports of a possible aid request and a decision by Moody's rating agency not to downgrade the country's Baa3 assessment, leaving it one step above "junk" grade.
indiatimes.com
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