Euro Zone Launches Bailout Fund ... Just in Case

Spain says it doesn't need it yet
By Kevin Spak,  Newser Staff
Posted Oct 8, 2012 1:55 PM CDT
Euro Zone Launches Bailout Fund ... Just in Case
German Finance Minister Wolfgang Schaeuble, right, talks with International Monetary Fund managing director Christine Lagarde, during the Eurogroup meeting, in Luxembourg, Monday Oct. 8, 2012.   (AP Photo/Yves Logghe)

(Newser) – The Euro zone officially launched its 500 billion euro bailout fund today, but finance ministers said that its first intended beneficiary, Spain, didn't need help just now after all. "Spain needs no aid program," German Finance Minister Wolfgang Schaeuble told reporters. "Spain is doing everything necessary, in fiscal policy, in structural reforms." For now, the ministers are worried about Greece, which is still in intense negotiations with the European Commission, Central Bank, and IMF over budget cuts, Reuters reports.

Germany, the Netherlands, and Finland all believe that the ESM should only be used for future bank catastrophes, not "legacy" problems like those in Spain and Ireland. Others expect the fund to be able to lend a hand whenever necessary. Asked what would happen if Spain did request help after all, Luxembourg's finance minister replied, "I think we should deal with such a request when it comes." In the meantime, the ministers are focusing on Greece. The chairman of the Eurogroup said he didn't expect "any major decisions" on its bailout negotiations, though he added, "Hope never dies." (Read more European Central Bank stories.)

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