HAMBURG, Germany Nov 8 Loans given to
struggling euro zone states will be paid back but the
possibility of default still has to be factored in, the head of
the euro zone's bailout fund told Reuters on Thursday.
"Loans will be serviced and paid back. Risks are of course
taken on and you cannot completely exclude the possibility that
such risks will become real," Klaus Regling, head of the
European Stability Mechanism (ESM), said on the sidelines of an
economic conference in Hamburg.
"But it is not the usual case - it's a big exception, if it
ever were to even arise. That has not happened so far," he said.
Speaking to an economic conference in Hamburg, Regling also
suggested debt-crippled Spain may not need a full state bailout.
"If Spain gets money for its bank restructuring, does its
homework, labour market reforms and budget consolidation and the
result of these efforts is that interest rates on the markets
are lower again because the markets have more confidence, why
should Spain be forced to take a bailout?"
"It is certainly good that the option is there in case the
markets change their minds," he added.
Spanish Prime Minister Mariano Rajoy has held out against
calling for a rescue package on top of a bank bailout that
includes a 100 billion euros European Union credit line.
Investors had expected Spain to make a rescue request before the
end of the year but some now think it could be postponed.
Earlier on Thursday, Spain sold 4.8 billion euros of bonds,
more than the targeted amount, including some longer-term debt.