EU Mulls Throwing Spain Precautionary Credit Line: Report

Published June 05, 2012

| Reuters

European officials are considering whether to offer Spain a precautionary credit line via the bloc's rescue fund to help it shore up its ailing banking sector, a German newspaper reported on Tuesday, citing several unidentified sources.

"Spain could apply for precautionary aid even before the Greek elections and before it presents a report on the state of its banks," Die Welt newspaper said, citing the sources, in a preview of an article that will appear in its Wednesday edition.

Greece goes to the polls on June 17.

The report said a credit line would give Spain the option of trying to raise funds on its own for recapitalising its banks, and then tapping the external aid if it failed to raise enough.

Two Spanish government sources denied earlier on Tuesday that Spain needed or wanted a precautionary credit line from the European Financial Stability Facility or the International Monetary Fund.

(Reporting by Annika Breidthardt, Noah Barkin, additional reporting by Fiona Ortiz and Julien Toyer)

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