EU Official: Italy, Spain Will Not Need Bailouts

Aug. 5, 2011
Market unrest this week was 'not justified.'

Neither Italy nor Spain will need to be bailed out, but both eurozone economic giants need to strictly implement planned reforms, EU Economic Affairs Commissioner Olli Rehn said on Friday.

"I do not believe either of these countries will need a program," Rehn said as he sought to soothe market concerns that the third- and fourth-largest economies in the 17-nation eurozone could follow in the footsteps of smaller beleaguered euro nations Greece, Ireland and Portugal.

Italy and Spain have faced record borrowing costs on markets this week amid fears that the pair could be next in line for trouble as Europe's debt crisis spreads from weaker peripheral countries.

The market unrest seen in the last few days was unjustified "on the grounds of economic fundamentals," Rehn said.

"It is not justified for Italy. It is not justified for Spain."

Rehn said the drama on the markets was simply "incomprehensible," given there had been no major changes in the economies of either nation and that both had committed to ambitious reforms for "fiscal consolidation [and] ... to put their economies back on track."

But in the case of Italy, approval and implementation of a welfare reform plan currently before parliament "should be accelerated" while further labor market reforms and the opening of closed professions "should be prioritized," Rehn said.

Turning to Spain, Rehn welcomed its "bold reforms" while saying that, as for Italy, "forceful implementation is paramount."

Madrid needs to complete moves to strengthen its banking sector and ensure that fiscal consolidation was strictly implemented at the regional level, he said.

Copyright Agence France-Presse, 2011

Popular Sponsored Recommendations

Discrete and Process Manufacturing 2024 Trends and Outlook for North America

Oct. 29, 2023
Manufacturers are reaping the benefits of automation and cloud-based solutions. Discover what is driving today's industry trends and how they can shape your growth priorities ...

Legacy Phone Lines Are Draining Your Profits

Oct. 30, 2023
Copper wire phone line expenses that support emergency devices could be costing your company millions of dollars in wasteful overhead expenses. Rates have been skyrocketing while...

Are You Positioned To Tackle Supply Chain Risk?

Sept. 20, 2023
Supply chain disruption is here to stay, but you can keep ahead of potential issues — and identify new opportunities — by regularly assessing your suppliers. Download our supplier...

Complexity Reverberates Across Manufacturer Operations

Aug. 21, 2023
Design complexity and revenue disruptions overshadow machine builders’ progress in planning and execution. In this research report conducted by IndustryWeek, learn how implementing...

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!