The Spanish Prime Minister announced today that he has no immediate plans to seek an ECB bail-out if a decision is made by a German Court to not oppose the bond buying rescue plan. Which is intended to create a level playing field without interest rate distortions for E.U. members who have introduced austerity measures. This announcement follows a similar interim decision on Saturday by the Italian premier, Mario Monti who said that he would not be accessing the ECB fund anytime soon.
Both leaders used language that did not rule out the opportunity being offered help despite the fact that if the new rescue plan is ratified tomorrow it should calm the high interest rates in the bond markets by relieving uncertainty. It may be said that the two countries are attempting to calm voters nerves ahead of two crucial votes tomorrow in Germany where there is strong opposition and at the ECB. They may also be playing politics with there own electorate; Spain is having elections in October and is trying to solve or at least contain its economic problems through austerity measures. And Italy hopes to grow its economy out of problems despite having the largest EU debt of $2,2 Trillion. Perhaps we are observing a juggling act of sound economics versus political survival but tomorrow promises to be a make or break time for the Euro..
