EU rubbishes report of 250-billion-euro Spanish credit line

BRUSSELS: The European Commission dismissed as "rubbish" reports on Wednesday that the EU, the IMF and the US were planning a credit line of up to 250 billion euros for Spain.

"I can firmly deny this story," EU economic affairs commissioner Olli Rehn spokesman's said. "I checked of course from the commission side if there was any team sent from Brussels, as the article claims. And I can say that that story is rubbish."

The original report in Spanish daily El Economista said that officials were seeking to come up with gentler conditions than those forced on Greece in its 110-billion-euro bailout.

The EU executive underlined that a 500-billion-euro EU emergency fund of loans and guarantees, that Spain or any other troubled eurozone country could ask to tap into, is "now in place... under Luxembourg law."

"It's ready but there has been no request and no plan whatsoever for any member state... for activation," the spokesman added.

A string of leading EU figures have had to deny persistent reports that Spain is preparing to call for help, and the subject is already dominating corridoor chat going into a summit of the 27 European Union leaders in Brussels on Thursday.

Spain "is working to ensure that these rumours remain unfounded, as is currently the case," Spanish Economy and Budget Minister Carlos Ocana has said.

The director of the Washington-based International Monetary Fund, Dominique Strauss-Kahn, will meet with Spanish Prime Minister Jose Luis Rogriguez Zapatero on Friday, the Spanish government said in a statement.

Asked about the possibility of such a plan being prepared for Spain, though, Finance Minister Elena Salgado said: "Absolutely not. I don't know anymore how you want me to deny it."

Rehn on Tuesday told Spain it must introduce "extra" measures in its 2011 budget if it is to restore its public deficit to the EU limit of three percent of GDP by a 2013 target.