MADRID – Spain is feeling less pressure to seek European financial aid in the short term because its state borrowing costs have dropped since the European Central Bank announced its offer to buy bonds, a government official said Wednesday.
The official, who spoke on condition of anonymity in line with government policy, noted Spain's borrowing rates in the bond markets had dropped since the ECB announced its plan, under which it would buy the government bonds of countries that ask for a European bailout.
The official also credited the fact that the Spanish Treasury has already covered most of its 2012 borrowing needs, meaning it does not need to raise much more money from bond markets.
Prime Minister Mariano Rajoy reiterated Wednesday he saw no immediate need to ask for help but did not rule it out in the future.
Spain, which is in a double-dip recession and has an unemployment rate of over 25 percent, has been under pressure to tap the bond-buying program since it was announced in September.
The interest rate for Spain's benchmark 10-year bond has eased to around 5.5 percent from unsustainable highs of 7 percent before the ECB announced its plan. On Wednesday, it was down a little at 5.61 percent.
Separately, Spain's central bank said a net €247 billion in capital was pulled out of the country in the first eight months of the year, 620 times more than the €389 million registered for in the same period last year.
Net capital outflows show a lack of confidence in the economy. They come from foreigners selling stocks and shedding Spanish state debt and private bonds, as well as Spanish banks and citizens depositing money abroad.
Net capital outflows slowed in August, however, to €11.8 billion from €15 billion in July.
Jorge Sainz contributed to this report.