No bailout required for Spanish banks says Rajoy

Rajoy speaking in Chicago
Rajoy speaking in Chicago

Mariano Rajoy has said he does not believe the Spanish banks would need to ask for a bailout from Europe.

“I don’t think so,” the Spanish prime minister said when asked about the current situation in Spain’s banks.

Speaking in Chicago where he attended the two-day Nato summit, Rajoy expressed surprise at comments from new French Permiere Francios Hollande who said he was in favour of a European mechanism to support the recapitalisation of Spain’s banks.

“I don’t really know if Mr Hollande said that, because if he said it must be because Mr Hollande has information that we don’t have,” Rajoy added.

Hollande commented that it would be “desirable” for there to be recapitalisation of Spain’s banks.

These comments come shortly after Moody’s ratings agency cut the ratings of 16 Spanish banks, and Santander UK PLC, by one to three notches due to the effects of Spain’s second recession and the negative outlook on recovery.

Rajoy was keen to point out that his government was taking the necessary steps to ensure a quick recovery.

“In Spain, I think the measures we are taking are the measures that must be taken,” he said.

Rajoy was clear that the cuts he is making are the right ones as are the reforms introduced to the financial system to clean up the banks toxic balance sheets.

“Austerity yes, growth too,” Rajoy said.

“But I would also like a clear, forceful message in defence of the euro project and an affirmation of the sustainability of public debt of all the European countries that are subjected to this talk,” he added.

He also added his support for Greece to remain as a member of the single currency zone saying “I don’t want Greece to leave the euro,”