Mario Draghi is waiting for Spain to get back to him on whether his plan to save the euro is needed.
One month after the European Central Bank president unveiled an unprecedented bond purchase program to rescue Europe’s embattled southern fringe, Spanish Prime Minister Mariano Rajoy is showing reluctance to ask for the aid he pushed for with Italy on concern about the terms attached to it. As ECB policy makers meet in Slovenia today, Spanish two-year note yields are more than 50 basis points higher than the five-month low touched on Sept. 7, the day following their last decision.
Such considerations may color today’s gathering of ECB officials in Ljubljana for their monthly policy decision. Economists expect them to keep the key interest rate at a record low of 0.75 percent, according to the median forecast of 52 economist forecasts.
Spain has yet to signal if it will accept such terms. De Guindos said Oct. 1 that officials are studying the ECB plan and will make the “best decision for the interests of the Spanish economy.” That followed the unveiling of a fifth austerity package in nine months. The government announced plans to borrow 207.2 billion euros next year, which would increase its debt load to 90.5 percent of gross domestic product.