Chancellor Angela Merkel's spokesman said that Spain knows where to look for aid if it's needed, giving no ground to Prime Minister Mariano Rajoy's pleas that Germany consider new ideas to resolve the debt crisis.
Rajoy sought to open a new avenue of crisis fighting on June 2, when he added his voice to calls for a “banking union” in Europe involving a centralised system to recapitalise lenders. Merkel shut off another potential solution the same day as she toughened her opposition to euro area debt-sharing, telling members of her party that “under no circumstances” would she agree to eurobonds.
Options “that resemble eurobonds” are conceivable after a process of European integration lasting “many years”, Merkel’s chief spokesman, Steffen Seibert, told reporters in Berlin today. For now, “it’s up to national governments to decide whether they want to avail themselves of aid from the backstop and accept the conditions linked to it, and that of course also applies to Spain”.
Renewed pressure on the German leader came from French Finance Minister, Pierre Moscovici, and EU Economy Commissioner, Olli Rehn, who said that a first step towards a banking union should be to allow the euro’s permanent rescue fund to inject cash into banks instead of channelling it through governments. Spain plans to sell bonds maturing in 2014, 2016 and 2022 on June 7. The amount hasn’t yet been set.
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