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Italy deadlock makes no difference to Spain

Tuesday, Feb 26, 2013 - 02:54

Feb. 26 - Spain's Economy Minister tells Reuters Italy's deadlock does not put Spain closer to an Outright Minetary Transaction program. Rough Cut (no reporter narration).

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(ROUGH CUT ONLY - NO REPORTER NARRATION) Spain's Economy Minister Luis de Guindos says Italy's election deadlock does not put Spain closer or further than it was 24 hours ago from an Outright Monetary Transactions (OMT) program whereby the ECB buys government bonds in the secondary market provided the issuing country agrees to a fiscal adjustment program. (SOUNDBITE) (English) SPANISH ECONOMY MINISTER LUIS DE GUINDOS SAYING: "I think we should not pay too much attention to the short-term reaction of the markets, markets in the short-term overshoot and what I hope and I expect is that Italy will finally and eventually have a stable government that will continue with the reform agenda." "Spain is no closer, not longer (further), than it was from the OMT only 24 hours ago. We are exactly in the same situation and again I think we should not pay too much attention to short-term volatility. I think that at the end of the day what we have to regard is the medium-term scenario, but I think that is what markets are going to consider and to look at closely is the willingness of the new Italian government in order to pursue the policies that have given rise to much more calm, to much more tranquility with respect to Italy, with respect to the future of the euro zone." "Well the biggest fear that I have now, and I think it is the biggest fear for all the euro zone countries, is the recession that we are suffering. What we have seen over the last months is that the outlook is getting worse, this has been reflected by the figures of the (European) Commission and I think we will have to make an important effort in order to revert that situation, so I think that main target and the main goal of the economic policy of the euro zone countries over the next months is how to recover the economy and to start to create jobs again." "What we want to have is a stability program for Spain that will cover not only 2013, but also 2014 and 2015, and I think we have to send a two-fold message. The first message is that well we continue with the fiscal consultation effort and the public finances in Spain are back on track and I think that this is quite important. This is totally indispensable for the Spanish economy and secondly that this fiscal consolidation effort is accompanied by structural measures and that all in all we will recover growth for the Spanish economy. Without growth I think everything is going to be much more difficult, almost impossible. That's why we have to combine both elements. You have to combine the fiscal consolidation effort at, again, a sensible pace, with reforms to foster medium term growth and I think, you know, that is going to be the combination of elements that we have to agree with the European Commission with our partners in the euro zone and with the Spanish government."

Italy deadlock makes no difference to Spain

Tuesday, Feb 26, 2013 - 02:54

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