Spanish PM refuses to cross certain 'red lines' on austerity
Tuesday 11 September 2012
Printable
EmailSpeculators rushed to intimidate Spain's prime minister yesterday following comments that he won't accept certain conditions in return for the European Central Bank buying Spanish government bonds.
Mariano Rajoy warned on Monday night that there were "certain red lines" he won't cross.
"I could not accept them telling us which reduction policies are needed and which are not," he stipulated.
He said that he does not want to cut pension benefits because pensioners would be hit harder than the rest of the population.
Speculators retorted that a drop in Spain's borrowing rate since the ECB programme was announced last week might reverse if Mr Rajoy resisted pressure to accept conditions.
"It would appear that Spain feels less pressure to acquiesce than it did this time last week, thus creating further potential for disappointment as politicians contrive to grab defeat from the jaws of victory," said market analyst Michael Hewson.
Traders pushed the yield on Spain's benchmark 10-year bonds up to 5.72 per cent in morning trading.
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