Spain bailout 'inevitable'- Catalonia president

Catalonia's president Artur Mas said Wednesday a sovereign bailout for Spain is unavoidable, and Madrid should ask for it without a long delay. "External aid will be inevitable, so it would be better to face it without a lot of delay," said the head of the northeastern region, who is pushing for greater financial independence from the rest of Spain. The bailout prediction flies in the face of Spanish Prime Minister Mariano Rajoy's studious refusal to say whether the country needs rescuing, insisting instead on the need to study the matter. Mas, who met the previous day with Rajoy and other regional government leaders for deficit-cutting talks in Madrid, said there was no reason that he should share the opinion of the Spanish government. "Since the Spanish government has more information, it should decide when it is done and whether it is done or not," Mas said. "I understand from the information we have that Spain will end up having to have a rescue," he added. "Spain has the potential to emerge from this situation ... but it needs help for a period." Mas said there was no need to dramatize the situation, saying Spain had been greatly helped by the European Union in the past so as to develop economically. "Spain is already used to being helped," he said. "It's another matter entirely to know that there are certain countries that have a public opinion that they don't want it (the bailout) to be requested," Mas said. Prime Minister Jyrki Katainen of Finland said in a Wednesday newspaper interview that he felt it unlikely Spain would request a full sovereign bailout. A German government source said this week he did not believe Spain could make a "convincing case" for a rescue while it can still borrow on the financial markets. Spain's right-leaning Popular Party government has refused to say if a bailout is coming. Asked on Tuesday whether a sovereign rescue was imminent, the prime minister simply replied: "No." Mas, who has called snap elections on November 25 over an independence drive for Catalonia, said the Spanish regions, responsible for health and education, shouldered an "unfair" burden of the austerity measures. Regional governments agreed Tuesday to keep their 2013 deficits to 0.7 percent of economic output, while the central government's target is 3.8 percent. Rajoy has promised to review the distribution of the deficit-cutting effort from 2014. Spain has already agreed a eurozone rescue loan of up to 100 billion euros for its banks but the grim economy, bulging deficit and high borrowing costs are seen as driving it towards a broader sovereign rescue. The European Central Bank has said it could buy Spanish bonds on the open market to curb interest rates but only if Madrid first applies for help from the European bailout funds and submits to strict conditions. Rajoy's government has repeatedly said it must know the conditions before making any request. In the past week, Spain has unveiled an austerity budget for 2013 and revealed a lower-than-expected price tag for saving its banking system, two moves that would ease the path to a full bailout. The European Union's economic commissioner Olli Rehn said this week that Europe "stands ready to act in case there is a request". But European officials told AFP that the other key players were far from closing in on an agreement. They said this made it unlikely that an announcement would come by the time the Eurogroup of eurozone finance ministers meet on October 8, and maybe not even in time for a full EU summit on October 28-29.