Spain must seek help before ECB buys bonds: Nowotny
Baku, September 17 (AZERTAC). Spain would have to apply for a rescue package before qualifying for inclusion in the European Central Bank`s plan to buy debt of struggling euro zone members, ECB policymaker Ewald Nowotny said.
Nowotny told Austria`s Profil weekly that it was up to individual countries to ensure the ECB`s bond-buying plan helps to overcome the euro zone`s sovereign debt crisis.
"This can be an effective instrument to contain the crisis and stabilize expectations. But politics has to play along so that this instrument can be deployed positively," he said in the magazine interview.
"This is the only way to convince markets. If for instance Spain does not slip into the (euro zone) safety net, we cannot help," said Nowotny, head of the Austrian central bank.
Spain on Friday cleared another hurdle towards seeking external aid to finance its debts by announcing it would present by the end of September a new round of economic reforms, based on recommendations from the European Union.
Senior European sources said the new measures would probably become an economic program which Spain will have to implement in return for receiving support from the euro zone rescue funds and the European Central Bank to lower its borrowing costs.
Spain has accepted a European credit line of up to 100 billion euros to prop up its ailing banks as it seeks to avoid a full-blown bail-out which the euro zone would struggle to afford.
However, most analysts and policymakers believe it is only a matter of time before Spain will require more international help to lower its punishing borrowing costs.
Spain has accepted a European credit line of up to 100 billion euros to prop up its ailing banks as it seeks to avoid a full-blown bail-out which the euro zone would struggle to afford.
However, most analysts and policymakers believe it is only a matter of time before Spain will require more international help to lower its punishing borrowing costs.
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