World Bulletin / News Desk
Spain is negotiating with the euro zone over conditions for international aid to bring down its borrowing costs though the country has not made a final decision to request a bailout, three sources with knowledge of the matter told Reuters news agency on Thursday.
The favoured option being discussed is that the existing European rescue fund, the EFSF, would purchase Spanish government bonds at primary auctions while the European Central Bank would intervene in the secondary market to lower yields, the sources said.
No specific figure for aid has been discussed in the talks, which started several weeks ago, one of the sources said.
Other senior euro zone sources were more cautious, one saying nothing clear-cut had emerged on aid for Spain, while a fifth said no talks were going on at all.
Spain's prime minister's office declined to comment. A spokeswoman for the economy ministry said there was no change in the Spanish position, which is that it would wait until the next meeting of the governing council of the ECB on Sept. 6, hoping for details on how the ECB plans to intervene, before deciding on any move.
ECB President Mario Draghi has said the central bank could intervene to lower painfully high yields but only if the country concerned asked for similar help from the bloc's rescue fund first.
The three sources who spoke with Reuters on Thursday said the negotiations were focusing on conditions attached to the aid, which will be included in a memorandum of understanding.
While there is a political consensus that the conditions should be limited to what is already included in EU recommendations to Spain, which has pushed through a raft of painful austerity measures, two of the sources said euro zone countries were insisting on setting up a tougher schedule of monitoring.
Separately, two of the sources said Spain's euro zone partners and the European Commission have dashed its hopes of getting an emergency liquidity line for its banks before the first tranche of up to 100 billion euros of aid is disbursed in the autumn.
Spanish authorities had hoped to receive up to 30 billion euros in August to start recapitalising state-rescued banks, such as Bankia, CatalunyaCaixa and NovaGalicia.
According to the ratings agency Moody’s, Iran is fiscally and structurally well placed to come back into the global economic scene
PM Davutoglu meets the heads of the world's largest companies as he promotes Turkish economic interests at World Economic Forum
Fund cuts global growth forecasts for both 2016 and 2017 by 0.2 percentage points
'Runaway inequality has created a world where 62 people own as much wealth as the poorest half of the world’s population'
At a meeting in Vienna on Friday, the Organization of the Petroleum Exporting Countries decided against cutting output to raise prices
OPEC has agreed to raise its output ceiling to 31.5 million barrels per day
OPEC's poorer nations, led by Venezuela, want a cut to help boost prices
Move gives international recognition to renminbi, fund's Christine Lagarde says
Summit is expected to provide member states with opportunity to consult, exchange views on the most important issues concerning them in the framework of the Gas Exporting Countries Forum
Slowdown in Chinese economy, rising oil stocks in US, and oversupply from OPEC are all factors making price of oil lower
'World is more connected than ever before. More and more developing countries are seeking to join global trade networks,' WTO director-general says
European Central Bank is ready to use ‘all instruments available’ to stimulate the eurozone economy, Draghi says
Kazakhstan has overtaken Australia as the lead supplier of uranium for US reactors.
Depreciation of emerging market currencies, combined with low commodities prices, have made investors around the globe nervous