Spain is on the cusp of something, but no one seems to know for sure what it is. The country received good news from Moody’s that kept Spain’s sovereign paper rating at investment grade. That has not calmed speculation the country will ask for aid from the European Central Bank to buy its paper and bring down bond yields. That help would come with strings attached, unless the assistance comes in the form of a line of credit (maybe).
The European Union would have to help Spain set a budget and then watch over it, or at least that is what powerhouse Germany would like. Some experts say Spain wants to avoid that fate and will try to finance its trouble on its own. Every other hour there is news that Madrid will plead for help or it won’t.
A senior EU official said momentum has increased as resistance to the plan has fallen off in Germany, which has for weeks urged Madrid not to make the request. The official cautioned a formal application could still be weeks away.
“They are moving to a request, yet it may not happen today or tomorrow or this week,” said the official. “Germany’s moving and the timeline will depend on the Greek saga.”
Douglas A. McIntyre