No bailout talks on Spain: IMF

The International Monetary Fund (IMF) yesterday denied recent media reports on talks between the global lender and Spain, on contingency plans for the financial rescue of the troubled eurozone nation.

After a meeting with Spain's vice president on Thursday, IMF managing director Christine Lagarde said the IMF has not received a request from Spain for aid and was not drawing up plans for the country's financial assistance.

The IMF said that it will undertake a routine visit to Spain on 4 June to discuss with various agencies the recent economic developments in the country and in the eurozone. Observers believe that a clearer scenario of the situation will emerge after the planned visit.

Citing sources European media reports yesterday said that the IMF is weighing options in case Spain requires a financial rescue to save its struggling banks.

Although EU and IMF want to avoid a bailout, Spain wants to rescue its fourth-largest bank Bankia which collapsed following the crash in the Spanish property market. Bankia has asked for around €19 billion for its recapitalisation, in addition to the €4.5 billion the government already injected. 

It is believed that Spain may need around €10 billion from external sources to recapitalise Bankia as its own bank bailout fund has only about €9 billion available.

The EU has pressed Spain to spell out the massive rescue plan for the troubled lender to allay fears of a possible collapse of the financial markets.