Sweden’s Borg comments on Spain’s request for financial assistance

Swedish minister for Finance Anders Borg has reacted positively to Spain’s decision this weekend to seek financial assistance by suggesting it will calm markets and reduce the risks to global growth, reports Swedish wire service TT.

Borg characterised the developments over the weekend as fundamentally good news.

“We have had such large house and [commercial] property price falls in Spain that there has been a big hole in Spanish banks’ balance sheets. That is something the Spaniards themselves have not had the ability to handle. Now we get clarity about support from the eurozone and that reduces risks to the global economy,” Borg (pictured) told TT, according to local newspaper Dagens Industri, which republished the comments (TT is jointly funded by Sweden’s major news organisations).

“It ought to have a calming effect, although we have remaining uncertainty around the election in Greece.”

Borg was asked by TT about the distinction that his Spanish counterpart Luis de Guindos seemed to have made between characterising the move as seeking financial assistance rather than calling it an emergency loan.

“That is because the Spaniards want to show that otherwise they can manage their financial policies. That is why, for example, they have been so ambitious in their policies; they did after all raise VAT and adopted other measures.”

“But it is of course sensitive for all countries that have to ask for help. The Spaniards want to highlight that while they do require help with their banks, in other respects they have put their house in order,” Borg said.

 

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