European officials will move to prevent Spain from triggering a new round of convulsions as policy makers begin preparing for a summit next week aimed at easing the region’s three-year-old debt crisis.
European finance ministers meet in Luxembourg today to discuss Spain’s overhaul effort and closer banking cooperation. With European Union deficit enforcer Olli Rehn also saying the ministers may issue a statement lauding Greece on its budget measures, German Chancellor Angela Merkel tomorrow makes her first visit to the country since the turmoil began in 2009.
With the Spanish leader’s 2013 budget relying on a more optimistic economic outlook than that of most economists, Rajoy may say more about his strategy in Paris after finance ministers have wrapped up talks.
German Finance Minister Wolfgang Schaeuble has led criticism of the plan, saying that it’s moving too quickly and that bailout funding shouldn’t cover “legacy” debt accrued before establishing a supervisor. Ministers must also agree on the involvement of European banks outside the 17-member euro.