Spanish Economy Minister Luis de Guindos will hold talks with his German counterpart on Tuesday, Berlin said, as Spain’s borrowing costs spiralled out of control and stocks plunged in Madrid.
“It is true that (de Guindos) will meet our finance minister for regular bilateral talks tomorrow evening,” Marianne Kothe, a spokeswoman for Wolfgang Schaeuble, told a regular government news conference.
“I think they will of course discuss the current situation in Spain,” she said.
There was no news conference planned after the talks, Kothe added.
The meeting comes as the stock market in Madrid fell more than five percent Monday and Spain paid well over seven percent to borrow for 10 years on the secondary market — considerably above the level seen as sustainable.
The euro was similarly losing ground, trading at around two-year lows.
On Friday, the EU approved a 100 billion euro ($121 billion) bank bailout deal for Madrid but any positives were more than outweighed by news that the Valencia region was to ask the central government for financial aid.
Reports — strongly rejected — that Murcia might also need help jangled nerves further.
Kothe said that any request for aid from the regions was “a domestic issue.”
“This has nothing to do with European aid,” she said, adding Berlin had “no information” that Spain was poised to make an application for a full-blown state bailout.
Speaking in Madrid, de Guindos said, “of course,” he could rule out the possibility of a full bailout.
Kothe said the German government believed the bank rescue package would serve to calm the markets.
In an interview in Monday’s edition of mass circulation daily Bild, Schaeuble himself predicted that Spain would “get back on its feet quickly,” dismissing comparisons with bankruptcy-threatened Greece.
Spain’s economy minister due in Berlin amid market chaos
