Spain and Portugal are solid, Zapatero tells nervous markets

Brussels - Spain and Portugal are financially solid and any suggestion that the International Monetary Fund (IMF) and the eurozone will have to bail them out is "absolutely unfounded, irresponsible," the Spanish premier said Tuesday.

The Madrid stock exchange fell by almost 5 per cent on Tuesday, while the euro slid to a one-year low against the dollar at 1.3055, as markets feared that the Greek 110-billion-euro (146-billion- dollar) bailout may not be enough, and could be followed up by similar action for other eurozone countries.

But Jose Luiz Rodriguez Zapatero summoned journalists to an impromptu press conference in Brussels to "confirm his calm confidence in the strength of public accounts in my country," adding he had "the same confidence in Portugal's."

He said he did not "give any credit" to suggestions that Spain was preparing to ask for a bailout, calling the rumors "absolute madness."

He said that any increase in risk premiums being applied to Spanish bonds as a result of market speculation would be "simply intolerable, and of course we are going to counter it."

Zapatero insisted that Spain's public debt as a ratio of its gross domestic product (GDP) was "20 points lower than the European average" and said that concerns about its banking system's vulnerability to the collapse of the housing market were "unfounded and exaggerated."

He also suggested that the European Commission's spring economic forecasts, due Wednesday, would show that Spain has emerged from the recession ahead of expectations, while figures out Tuesday already showed the country's high unemployment has started to dip.

"We ask all economic operators to look at real data," he said.

Source: Earth Times.
Link: http://www.earthtimes.org/articles/show/321969,spain-and-portugal-are-solid-zapatero-tells-nervous-markets.html.