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EU leaders say no plans to discuss Spain bailout

EU leaders say no plans to discuss Spain bailout

European Union leaders say they aren't planning to talk about possible financial help for Spain at a Thursday summit amid rumors that it could follow Greece in seeking a bailout.
German Chancellor Angela Merkel told reporters Wednesday that she will push for tighter budget rules and will encourage Spain to keep up efforts to make labor reforms and budget cuts.
"One should first see what Spain has achieved in recent weeks," she said on her way to a meeting of center-right leaders in Brussels.
Under pressure from markets and other EU nations, the Spanish government on Thursday agreed labor market reforms to encourage companies to hire _ and make it easier to fire _ workers in an effort to cut its jobless rate, the highest in the eurozone at around 20 percent.
The determination to make long-delayed structural reforms _ usually one condition of International Monetary Fund loans _ and a scheduled meeting between the Spanish prime minister and IMF head Dominique Strauss-Kahn have fueled rumors that the country could be seeking financial aid options.
European government and European Union officials on Thursday rejected a report in the Spanish daily El Economista that said the IMF, the European Union and the U.S. Treasury are preparing a package for Spain that includes a (EURO)250 billion ($307 billion) credit line.
Adding to market worries over the potential costs of rescuing heavily indebted Spanish banks, the report sent Spanish government borrowing costs to a record high against benchmark German bunds on Wednesday.
Similar market pressure forced Greece to seek a (EURO)110 billion bailout from the International Monetary Fund and the EU last month _ and for EU nations to set up a a massive (EURO)750 billion rescue package for member countries that are unable to make debt repayments.
Austrian Finance Minister Joseph Proell said Spain "will not be in the center of the summit" and there was no need for emergency talks.
Merkel also said she would ask other EU countries to make structural reforms and to agree to strip EU voting rights from countries that persistently ignore EU debt and deficit limits.


Updated : 2021-10-23 12:00 GMT+08:00