Spain Has Time, Greece Does Not: ECB’s Nowotny

Spain might have the luxury of time to delay a request for bailout funds but the timetable for Greece is more urgent, according to European Central Bank (ECB) policy maker Ewald Nowotny.
Reiterating his view that Spain does not need to request immediate aid, Nowotny told CNBC that it was no surprise that Spain was delaying any credit request.

“[A Spanish bailout] is a decision that has to be taken by the Spanish government. As far as I can see… there is no need [for a bailout] as the government is fully financed until the end of this year.”

Spanish Prime Minister Mariano Rajoy continues to deny that his country will sign up to the ECB’s proposed sovereign bond-buying program — called Outright Monetary Transactions (OMT) — as it would mean that Spain would have to agree to strict conditions.

“If you go for OMT, this is a program with very strict conditions, but as long as you are not in this program you are not under these conditions. I could imagine that this is one of the aspects that is on the minds of the Spanish government,” Nowotny said.

 One in four Spaniards is unemployed and figures released on Monday showed that retail sales have dramatically fallen from a year ago as a recent hike in value-added tax (VAT) deters shoppers. More bad news was released on Tuesday morning as data revealed that gross domestic product (GDP) fell for a fifth consecutive quarter.

Nowotny, however, remained optimistic about Spain’s economy. He said it was hard to determine when and if Spain would apply to the ECB’s bond buying scheme to help lower its debts. 

Read more: http://www.cnbc.com/id/49606164