Spain file on IMF table, capital fleeing Madrid

The situation in Spain is being studied by the International Monetary Fund (IMF), just as the country's central bank has announced a flight of capital from the country. In the first three months of this year, some 97 billion euros were removed from Spanish banks and taken abroad. Rumours of a possible bailout of Spain by the IMF are spreading but have been denied, with the Washington-based institution and its director, Christine Lagarde, insisting yesterday that Madrid has not requested any aid and that the IMF is not assessing any financial assistance plan for the country. Lagarde's comments came after a meeting with Spain's Deputy Prime Minister, Soraya de Santamaria. IMF inspectors are due to arrive in Spain on June 4 for the customary talks on Article IV, the report on the country's state of health. The IMF will present its report on Spanish banks on June 11, according to the Finance Minister, Luis de Guindos, which will show that 70% of the Spanish banking sector is in good health. De Guindos admitted that the country's banks are having problems financing themselves. Spain finds itself in a difficult situation, while the future of the euro is being played out in both Spain and Italy. Reports from the Wall Street Journal, which have been subsequently denied, suggest that the IMF has begun internal discussions on the possibility of loans to Spain if Madrid fails to gather the funds needed to recapitalise Bankia. The Spanish government believes that it has at least until October to collect the funds necessary to recapitalise the country's third biggest bank. One option, the Wall Street Journal writes, would be a loan of up to 300 billion euros over 3 years, though the bailout could also involve loans of lower amounts and with shorter deadlines.(ANSAmed).