SPAIN: Economy Minister Elena Salgado says Madrid will oppose any solution to the euro zone crisis that involves private help

Record ID: 566439

  • Title: SPAIN: Economy Minister Elena Salgado says Madrid will oppose any solution to the euro zone crisis that involves private help
  • Date: 21st July 2011
  • Summary: MADRID, SPAIN (JULY 20, 2011) (REUTERS) EXTERIOR OF SPANISH STOCK MARKET BUILDING/ PEOPLE ARRIVING MEDIA INSIDE STOCK MARKET CEO OF SPAIN'S BIGGEST SAVING BANK, BANKIA, RODRIGO RATO, GREETING IBERIA'S CEO, ANTONIO VAZQUEZ RATO AND VAZQUEZ BEING PHOTOGRAPHED VARIOUS OF RATO POSING FOR PHOTOGRAPHERS STANDING NEXT TO BELL RATO RINGING BELL PEOPLE CLAPPING RATO GIVING THUMBS UP SIGN ELECTRONIC BOARD READING: "SPANISH STOCK MARKET WELCOMES BANKIA" (SOUNDBITE) (Spanish) BANKIA CEO RODRIGO RATO, SAYING: "We have been able to enter the market in the middle of a real financial storm that has imposed the hardest financial conditions of the last decade. As an investor reminded me this morning, this has been unfortunately, the perfect storm. We are all aware of the fact that investors were and still are reluctant to variable rent, to the financial sector and, unfortunately to Spain, at the moment. Last week, the publication of the bank stress tests results was aimed to contribute to improve the image of the European banks' sector but we all know that such publication was not favourable for our debut in the markets." ELECTRONIC BOARD SHOWING BANKIA MOVEMENTS/ RATO SPEAKING RATO AND CHIEF EXECUTIVE OF BOLSAS Y MERCADOS ESPANOLES, ANTONIO ZOIDO, TOASTING CHAMPAGNE ELECTRONIC BOARD SHOWING BANKIA MOVEMENTS
  • Embargoed: 5th August 2011 13:00
  • Keywords:
  • Location: Spain, Spain
  • Country: Spain
  • Topics: Education,Economic News
  • Reuters ID: LVA8FEJ1YIJFWOX6XJF4MZI6LGS6
  • Story Text: Spanish Economy Minister Elena Salgado said on Wednesday (July 20) that Spain would not support private sector help if the second Greek rescue package should spread the euro zone crisis to other economies.
    "Spain doesn't support the participation of the private sector in a way that can translate into a contagious situation for other economies," Salgado told Congress.
    Markets have been rattled by concerns that private sector help would prompt rating agencies to downgrade Greece to default, which would have a knock-on effect on other euro zone members such as Spain, who are struggling to contain financing costs.
    Euro zone officials are due to meet on Thursday (July 21) to try to hammer out a deal for a second Greek rescue package and draw a line under a spiralling debt crisis that is tearing into Spain and Italy.
    Salgado made the comments as investors closely watched Spanish lender Bankia make its bourse debut at 1000 GMT on Wednesday, to see whether its issue price was discounted enough to lure buyers.
    Bankia, formed from the merger of seven regional banks, further reduced an already cut-price offer to 3.75 euros per share on Monday (July 18), in a last-ditch attempt to attract investors highly averse to risk amid a spiralling euro zone debt crisis.
    "We have been able to enter the market in the middle of a real financial storm that has imposed the hardest financial conditions of the last decade. As an investor reminded me this morning, this has been unfortunately, the perfect storm. We are all aware of the fact that investors were and still are reluctant to variable rent, to the financial sector and, unfortunately to Spain, at the moment. Last week, the publication of the bank stress tests results was aimed to contribute to improve the image of the European banks' sector but we all know that such publication was not favourable for our debut in the markets," Bankia's CEO, Rodrigo Rato, said in a speech at the bank's market debut ceremony in Madrid.
    Rival Banca Civica, which has joined Bankia in a dash to market to raise capital to plug a funding gap, priced at the lower end of its indicative range late on Tuesday (July 19) and reduced the institutional tranche of the offer due to sluggish demand.
    Shares in Banca Civica, around a quarter of the size of Bankia, will start trading on Thursday.
    Both banks have forced through initial public offerings as part of government-driven measures to increase solvency ratios and reassure global markets about the stability of Spain's financial system.
    Both Bankia and Banca Civica scraped a pass mark in the Europe-wide stress tests on Friday (July 15), which included proceeds from the share offerings. Five of the eight banks that failed were Spanish.
    The smooth stock market listings have been seen as a key part of the government's banking overhaul, but market focus has shifted as the cost of borrowing soars for Spanish banks in line with sovereign debt, which has hit euro-era highs in recent days.
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