Current Event on Spain

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5/17/13
Per.7

Spain

Fresh tensions emerged between Germany and southern Europe as Spain and Italy criticised Berlin's proposals for a European Union super commissioner with powers to police national budgets and punish those with large deficits. "This is an idea, that considered on its own, I personally don't like," said Spanish prime minister Mariano Rajoy after meeting his Italian counterpart Mario Monti in Madrid. Monti claimed not to have read a Der Spiegel interview in which European Central Bank (ECB) president Mario Draghi threw his weight behind the super-commissioner idea, but nevertheless recalled that, in 2003, Germany has been one of the first countries to break EU deficit rules. "It doesn't sound very good," he added. "Markets could take this as a sign that current instruments do not work."

Both prime ministers claimed their recession-hit countries did not currently need a soft bailout that would allow the ECB to start buying bonds to bring down borrowing rates, though Rajoy was prepared to admit a request might come eventually. "The instrument is there and any country can ask for it if it finds it necessary. And I will do just that," he said. "When I believe that it is in the interests of Spain to ask for it, I will ask for it," he said. Monti said Italy did not need the bailout, but said it was important that at least one country use the eurozone's new soft bailout mechanism in order to prove to markets that the ECB was serious about defending the euro.
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