Date: Wednesday 22 Aug 2012
The stand-off between Spain and the European Central Bank (ECB) may finally come to an end in mid-September, Goldman Sachs has said in a report.
Around that time, the US investment bank expects the Spanish government to make an official request for assistance from the European Financial Stability Facility (EFSF) on the basis of two reasons.
First, it coincides with the Eurogroup/Ecofin meetings in Cyprus and secondly, it comes ahead of long-term bond redemptions worth €20bn in addition to €4bn in interest payments even though Spain's cash position is secure for now.
Goldman does not "expect further conditions to be attached to the Memorandum of Understanding beyond what the Spanish government is already planning at this stage." However, the EFSF/ESM assistance agreement would secure implementation of the planned fiscal cuts and reform process, the bank added.
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