Prior to the European Union summit economists from the IMF have suggested that Spain and Italy make a combined aid proposal. This was shot down by representatives from both Spanish and Italian governments as Madrid would rather do the procedure alone, and Rome thinks they don’t need it.
The International Monetary Fund called on the eve of a European Union summit for both Spain and Italy to seek euro zone assistance to draw a line under the bloc’s debt crisis, but Rome has rebuffed the idea and Madrid seems likely to apply alone.
The two-day Brussels summit will debate steps towards a single banking supervisor and proposals for closer euro zone integration, including German Finance Minister Wolfgang Schaeuble’s idea of a super-commissioner with veto powers over national budgets.
No decisions are expected this week and there is no certainty as to when Spain will come off the fence.
Spain dodged a bullet on Tuesday when Moody’s maintained its credit rating at investment grade, with a negative outlook, on the assumption that Madrid will trigger European Central Bank intervention soon to lower its borrowing costs.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.