16jun10

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EU denies preparing credit line for Spain

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The European Commission on Wednesday denied a media report that the European Union (EU) is preparing a rescue plan for Spain with the International Monetary Fund (IMF) and the U.S. Treasury.

Amadeu Altafaj, a spokesman for the European Commission, said at a press conference that there is no request from the EU member state to activate the 750-billion-euro safety net, which has been finalized by EU finance ministers last week.

A report published in Spanish El Economista on Wednesday said that the EU, the IMF and the U.S. Treasury were discussing an emergency liquidity plan for Spain, involving a credit line of up to 250 billion euros (307 billion U.S. dollars).

The spokesman denied this report firmly and assured there was no any team sent from Brussels to work on this plan, which the article had claimed.

"I can firmly deny this story once again,"Amadeu said."I can say that this story is rubbish."

The IMF has also denied this rumor by saying it was "totally unfounded" and declaring a trip to Madrid late this week would only be a "working visit", which had been seen as a signal of the speculated rescue plan.

European Commissioner for Economic and Monetary Affairs Olli Rehn Tuesday asked Spain to hand in a detailed deficit-cutting plan for 2011.

Spain has announced a fiscal consolidation target which will cut the deficit to below 6 percent of its gross domestic product ( GDP) next year from the present level of 11.2 percent and promised to meet the EU's 3-percent ceiling by 2013.

A study published Wednesday by the European Policy Center, a Brussels-based think tank, said that economic development in a group of European countries such as Italy and Portugal was " unsustainable", while Spain was "in danger" of being a part of it.

[Source: Xinhua, Brussels, 16Jun10]

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