ECB denies in talks on Spanish bailout

NICOSIA/AMSTERDAM (Reuters) - The European Central Bank is not negotiating a rescue package for Spain alongside the International Monetary Fund, an ECB spokeswoman said on Friday, denying a newspaper report.

"The reporting is unfounded. No negotiations are ongoing. It would be up to Spanish authorities to make a request," the spokeswoman said.

Het Financieele Dagblad reported on Friday without naming sources that the ECB and IMF were in talks over a package worth up to 300 billion euros ($387 billion). The Dutch financial daily said this would pave the way for the ECB to buy Spanish bonds to lower Madrid's borrowing costs.

The ECB spokeswoman said the bond-buying plan, announced by the bank last week, was "a monetary policy initiative and cannot be made conditional to any negotiations." The ECB would only activate it "if the external conditions are met."

Citing people familiar with the matter, the paper said the ECB wanted to ensure the participation of the IMF to make sure Spain faced strict conditions to cut spending and reform its economy in exchange for any aid.

The program would take three years and amount to a maximum of 300 billion euros, it said.

Spanish Prime Minister Mariano Rajoy said earlier this week he had no objection to the IMF monitoring Spanish compliance with conditions for any assistance.

Euro zone finance ministers meeting in Nicosia pressed Spain on Friday to clarify whether it will seek financial support.

A euro zone official told Reuters in July that Spain's Economy Minister conceded at a meeting with his German counterpart Wolfgang Schaeuble that it might need a bailout worth 300 billion euros if its borrowing costs remained unsustainably high.

Spain's bond yields have fallen sharply since the ECB announced the bond-buying plan.

(Reporting by Jan Strupczewski, Annika Breidthardt and Gilbert Kreijger; Editing by John Stonestreet)