MADRID (Reuters) - Spain flatly ruled out needing a bailout and said results of extra health checks on its ailing savings banks would be published next spring, as its government and central bank stepped up efforts to calm uneasy investors.
As concerns that the euro zone debt crisis could spread to the Iberian nations gripped markets, Prime Minister Jose Luis Rodriguez Zapatero said there was “absolutely” no chance Spain would need to seek outside help to manage its finances.
The country had no plans to introduce extra fiscal measures either, and investors should think twice about betting against it, he added, telling private regional broadcaster RAC1 radio: “Those who are taking short positions against Spain are going to be mistaken.”
The premium on Spanish government bonds over benchmark German debt hit a new euro-lifetime high on Friday, as markets targeted larger euro zone periphery states while policymakers scrambled to deny reports Portugal was being pressured to seek a bailout.
Markets have continued to sell off Spain’s sovereign bonds on concerns it might eventually be fourth in line for a rescue, with worries about the stability of its weaker banks pulled back into focus by the major role that Ireland’s lenders played in forcing Dublin into a bailout.
Javier Ariztegui, deputy Bank of Spain governor, on Friday urged the country’s unlisted regional savings banks, hard hit by a burst property bubble, to push ahead with mergers and said the results of additional stress tests would be ready by late March.
In the meantime, the banks needed to continue efforts to clean up their balance sheets and show greater transparency, particularly in detailing quarterly results.
The extra stress tests — which would be published ahead of parallel checks due to be conducted in other parts of the EU — would cover “complementary information on promotion and construction, on residential mortgages, detailing collateral and corresponding loan-to-value ratios,” he said.
With the exception of a handful of small unlisted savings banks, all of Spain’s banks passed this July’s Europe-wide stress tests — though analysts have questioned their relevance since the Irish bailout was announced.
Zapatero said neither the European Commission nor the Central Bank had urged Spain to take additional measures in order to meet targets to cut its deficit to euro zone limits by 2013.
“The European Commission has not asked Spain for anything, the ECB has not asked Spain for anything, neither yesterday nor the day before,” he said.
He reiterated that his government did not plan any tax hikes on top of a one-percentage point rise in value-added tax earlier this year.
“The VAT rise has contributed a lot to our deficit reduction,” he said, referring to figures released on Tuesday showing Spain’s central government deficit for the year to October had fallen by 47.3 percent, year-on-year.
“There will be no more commitments in fiscal matters,” he said, repeating comments made in recent months.
Additional reporting by Robert Hetz and Judith MacInnes; Editing by John Stonestreet