GENEVA, SWITZERLAND – The International Monetary Fund (IMF) and Spain have both denied that bailout plans are being discussed as the organization’s chief Christine Lagarde meets with the Spanish deputy prime minister Soraya Saenz de Santamaria met Thursday 31 May in Washington.
Spain’s economy minister Luis de Guindos denied any discussions with the IMF of a rescue plan, telling Spanish television “My desire is to not come out and deny these rumours because they are senseless”.
The Wall Street Journal had reported earlier that Spain had begun talks with the IMF’s European department to discuss the size of rescue loans should it be unable to find funds to back failing Bankia, the country’s third largest bank. Recently Bankia asked Spain for an additional €19 billion. The bank had already received a €4.5 billion injection from Madrid.
IMF spokesman Jerry Rice denied that the global lender is preparing a bailout for Spain.
Concerns about Spain’s banks have added strain to the eurozone’s crisis, which had been focussing until recently on Greece, which awaits the result of elections on June 17 for the formation of a new government.
Meanwhile, Spain’s central bank published data Thursday 31 May, showing that €97 billion in capital, about a tenth of the country’s GDP, had left the country in the first quarter of 2012. Government borrowing costs for Spain hit record highs as the country struggles to contain its twin financial and economic crisis.