A DUTCH NEWSPAPER has reported that the European Central Bank and the International Monetary Fund have begun discussions on the possibility of a €300 billion bailout package for Spain.
The Financieele Dagblad, an Amsterdam-based financial newspaper, said the two parties had started “informal talks” led by ECB president Mario Draghi and IMF director-general Christine Lagarde.
It added that the aid package would be discussed at the two-day meeting of EU finance ministers which begins today in Cyprus.
The IMF is being involved in the arrangements, it said, after the ECB last week agreed a new policy where countries which could be eligible for its new bond-buying programme must submit to strict financial oversight.
Curiously, the report does not mention any involvement from the European Commission – the third leg of the ‘Troika’, which acts as a sort of collective representative of the other Eurozone nations, and which would usually be expected to have a major role in any bailout.
If the Spanish bailout funds were eventually paid from the European Stability Mechanism – which, when it comes into effect, will make up two-thirds of the bailout funds for Ireland, Greece and Portugal – then Ireland could have to contribute almost €3.2 billion to the Spanish rescue.