OECD’s Gurria: Spain’s Reluctance to Seek Bailout Justified

“Spain’s reluctance to ask for a bailout was justified, said Angel Gurria, the secretary general of the Organization for Economic Cooperation and Development (OECD), as there were signals that any calls for help by Madrid may be rejected.

Spain’s government has been expected to seek help from the euro zone bailout fund, the European Stability Mechanism (ESM), to help ease pressure on its finances and economy, which is in recession. However, Madrid has so far resisted because such assistance comes in return for fiscal reforms.

“If you are the leader of a country that has done everything that had to be done, and then the ECB (European Central Bank), works on the secondary markets for you and lowers those yields and (yet) you are told that you have to go and ask for a (bailout) and you say, ‘OK,’ but then you’re given very strong signals that if you go, you will be told, ‘No.’ How can you reconcile those two things?” Gurria told CNBC on the sidelines of theInternational Monetary Fund’s semi-annual meetings in Tokyo.”

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