Spain Opens Door to Asking for Help

Spain’s Prime Minister held a press conference, discussed the situation, his government’s steps. reforms and liquidity issues. He refused to answer whether Spain will ask for help or not. This is a change from the previous approach. He also said that he wants to know what other measures the ECB will take before he will take a decision. The days of denial are over.

Rajoy is preparing the public for a U-turn in policy. The next step seems like an official bailout request.

A Spanish aid request was the missing piece needed for the ECB to act and buy bonds. Rajoy missed the opportunity to ask for aid in a public appearance he held together with Italian PM Monti.

Rumors about a Spanish aid request and a response by the ECB were circulating beforehand.

Draghi conditioned ECB bond buying (even printing money US / UK style) with a request from the governments, and staff work at the ECB.

Draghi’s words disappointed the markets, that were expecting immediate action, but since then, the markets have recovered.