Spain wants the ECB to guarantee a 200 basis point spread if it seeks a bailout

In Europe, Spain is expected to formally apply for a Troika bailout in November. Despite the Rajoy's government's denials that it has not sought a bailout, Rajoy and his ministers have never specifically said that they refused to consider a bailout. In fact, it is commonly believed that the Rajoy government is negotiating the terms of a bailout right now and is waiting until November before a finalised plan is unveiled. To wit, the latest informtion from government sources says Rajoy is requesting an explicit target spread backstop from the ECB.
According to the ECB's new OMT plan, new bailouts in the euro zone will be managed by the Troika of the EC, ECB and the IMF with the European Stability Mechanism acting as the mechanism through which the bailout occurs. The ESM will buy any Spanish...


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