IMF forced to deny reports it has plan to bail out Spain
THE International Monetary Fund said it is not preparing financial aid for Spain and the country denied any talks about a bailout even as its borrowing costs approach eurozone records.
"There's been no request for financial assistance from Spain and the IMF is not making plans for financial assistance to Spain," Gerry Rice, the IMF's director of external relations said.
The denial came as Spain revealed that almost €100bn in capital had left the country in the first three months of the year and the head of the ECB, Mario Draghi, lambasted its handling of Bankia, the troubled Spanish lender.
Spain, which this month nationalised Bankia group, the country's third-largest bank, is trying to shore up lenders and help cash-strapped regions as its own 10-year bond yields approach the 7pc level that prompted bailouts in Greece, Ireland and Portugal.
It is "senseless" to say Spain is talking to the IMF, Spanish Economy Minister Luis de Guindos said during a conference in Sitges, near Barcelona, after 'The Wall Street Journal' reported that the IMF's European department started contingency plans for a rescue loan to Spain should the country fail to find funds to bail out Bankia.
"The IMF's spokesman yesterday said no bailout is contemplated for Spain. I have nothing to add further than refer to his comment," Carmen Martinez Castro, deputy minister for communication, said.
IMF managing director Christine Lagarde met Spanish Deputy Prime Minister Soraya Saenz de Santamaria yesterday to discuss "recent economic developments in Spain", Mr Rice said. An IMF team will start its annual assessment of the country's economy on June 4.
Asked to comment on 'The Wall Street Journal' report, another IMF spokesman said the body always has contingency plans. Part of the job is to be prepared for any eventuality, he said. The IMF is always discussing scenarios with all member countries, the spokesman said.