Madrid's leeway shrinking

According to reports in the press the Eurozone countries are considering using the EFSF bailout fund to buy Spanish bonds from private banks in a bid to lower persistently high interest rates. But irrespective of the increasingly critical situation on the credit market the Spanish government is still insisting it will not seek a total bailout. But Madrid's room for manoeuvre is shrinking, the daily Jornal I warns: "In recent weeks Spain has taken over Greece's starring role in the euro crisis. Spain's problems have multiplied: first it was the banks and now it's the regions that urgently need help. The likelihood of Spain having to seek international assistance is growing. This help could take two forms: either Madrid demands that the bailout fund buy Spanish bonds or it applies for a total bailout as Portugal has done. The increasingly high risk premiums on Spanish bonds are leaving our neighbour's government hardly any room for manoeuvre."

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