Go to the Content Wednesday, 19 June 2013

About cookies: we use cookies to support features like login and sharing articles. Keep cookies enabled to enjoy the full site experience. By browsing our site with cookies enabled, you are agreeing to their use. Review our cookies information for more details.

Fears of contagion spread

By Ian Wishart - 14.06.2012 / 05:35 CET

Spain's woes could spread to Italy.
Running out of time
Socialists head for election victory
Next in line for a bail-out?

This article is reserved for paying subscribers...

Select your offer today and receive:


Hover over for more info	Free	€3 per week	€3.50 per week
Daily online news
Full access on mobile devices
E-alert customisable by policy
Access to editorial, comment
Profiles
Special reports
Access to the archives
Access to the e-paper
Newspaper delivered weekly
	Register	Select offer	Select offer

For more information please contact evsubscriptions@economist.com or call +32 2 540 9098

Please log in to read this article:

Don't have a login yet?

Discover your benefits and register for free now! It only takes a minute.

Subscribe to European Voice from €3 per week

Merkel, Hollande call for EU revamp to deal with eurozone crisis

In a joint statement, leaders of Germany and France call for new institutions for deeper integration.

Draghi: ECB did not make mistakes over Greece

European Central Bank president refuses to take blame following critical IMF report.

The paper clip

A round-up of the international press on Thursday, 6 June.

UNDER PRESSURE Mariano Rajoy, Spain's prime minister. REUTERS

Fact file

Spanish uncertainty

Questions remain over which eurozone rescue fund – the temporary European Financial Stability Facility (EFSF) or the European Stability Mechanism (ESM) that comes into operation on 1 July – will be used in Spain's bank bail-out.

Spain's government indicated that it wanted the EFSF to be used because it does not have preferred-creditor status. Germany's government prefers the ESM: this would mean that eurozone loans would have to be paid off before private lenders in case of default. Eurozone finance ministers are expected to discuss this when they meet in Luxembourg on 21 June.

Unlike the rescues of Greece, Ireland and Portugal, the terms of the bail-out will not oblige Spain to implement austerity measures, and the loans would be used only to recapitalise the financial sector. Nonetheless, finance ministers said that the money would be conditional on Spain's progress in meeting its fiscal targets.

The extent of monitoring by the ‘troika' – the Commission, the European Central Bank and the International Monetary Fund – looks set to be a contentious issue.

Mariano Rajoy, Spain's prime minister, said that there would be no major supervision, but this was contradicted by Wolfgang Schäuble, Germany's finance minister.