A major Spanish newspaper has called on the government to apply for a bailout immediately without waiting for approval from Germany in order to prevent a deepening recession. On Monday, the El Pais accused Spanish Prime Minster Mariano Rajoy’s government for delaying a bailout application from Europe.
“Delaying the bailout request is equivalent to condemning the Spanish economy to a prolonged and painful recession,” the paper stated.El Pais added that there has been no explanation from the prime minister on the reasons the government has not requested an intervention by the European Central Bank (ECB). “It can only be concluded that Rajoy is waiting for approval from Germany to go ahead, or that he does not want to request assistance whose counterpart would almost certainly be a requirement by the troika (Brussels, the ECB and the International Monetary Fund) of a pensions reform.” “But if those are the reasons for a reluctance that is so damaging to Spain, one has to reply that what is best for Spain’s economic recovery and to reduce unemployment in Spain should not rely on the acquiescence of another country,” the paper said. Economists have conceded that Spain’s high financing costs smother its economy, destroy investor confidence and prolong the recession possibly all the way into 2014. In November, Rajoy said a bailout was not essential for the moment, which triggered a senior official with the Institute of International Finance to call on the Spanish government to accept an EU bailout since without the aid the country will witness a financial market backlash. Battered by the global financial downturn, the Spanish economy collapsed into recession in the second half of 2008, taking with it millions of jobs. CAH/HSN