European Central Bank (ECB) President Mario Draghi’s newly unveiled plan to buy bonds and drive down the interest rates for eurozone countries in trouble has lessened the stigma of asking for help, according to Prime Minister Mario Monti of Italy. Still, neither he nor Prime Minister Mariano Rajoy of Spain are rushing to the window to request aid.
Bloomberg reported Friday that Monti commented after the plan was announced, “The drama in the word ‘help’ has been reduced.” He added, “Now, there are ways in the European Union (EU), which must be used under careful conditionality and in the interest of all, to confront” skyrocketing interest rates.
Both Italy and Spain have experienced soaring borrowing costs, and while Rajoy said over a month ago that he might consider requesting aid, he has held off doing so in an attempt to negotiate more lenient terms. He has also said that he needs time to go over the plan, which requires countries seeking aid to apply to the rescue fund under strict conditions before the ECB will step in. Monti, too, has said he is trying to keep from asking for help for Italy—but Spain is in a more precarious position.
Rajoy met with Chancellor Angela Merkel of Germany on Thursday, and said after the meeting that he had not offered any new promises regarding terms of a bailout. Merkel, for her part, said in the report that they “didn’t talk at all about conditions” for a Spanish rescue.
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Rajoy has been trying to keep a campaign promise to leave pensions uncut—something that runs counter to the austerity conditions that a bailout would impose. His government has already broken other campaign promises as it struggles to bring its economy in line with the requirements of the eurozone.