Spain pledges reform timetable, paves way for bailout

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Spain told euro zone finance ministers on Friday it will set clear deadlines for structural reforms by the end of the month, in a move European diplomats said would pave the way for an aid request before long to help it tackle its debt pile. Madrid’s borrowing costs have fallen sharply since the European Central Bank said it was ready to buy Spanish bonds but big borrowing needs before the year-end and a deepening recession mean most analysts and policymakers believe it is only a matter of time before it will require help.
“We will adopt a new set of reforms to boost growth … It will be in line with the recommendations of the European Commission,” Economy Minister Luis de Guindos told reporters after meeting his peers in Cyprus.
Euro zone policymakers have said that to get aid, Spain would need to adhere to strict conditions, which usually entail detailed reforms and concrete deadlines, rather than vague plans.
Madrid’s move is therefore seen by EU diplomats as a precursor to a request that pre-empts any euro zone calls for further reforms in an attempt to limit a political backlash at home, although de Guindos insisted the package was unrelated to any bailout terms.