Brussels shoots down PSOE’s plans for rescue fund

Alfredo Pérez Rubalcaba was at the tail end of a press conference called on Sunday to present the Socialists’ proposals to reactivate the Spanish economy, when the first reactions from Brussels began to filter through — and they poured cold water on the opposition leader’s plan to use European Stability Mechanism funds to aid families and small businesses.

Brussels made it clear that money allotted to bail out Spain’s banks can be used purely for that purpose. “I would ask Brussels to listen, to read what we are proposing,” the Socialist leader said on Monday. “This is not an employment plan; it is a plan to open credit lines. It is time for humility. I ask that the people in Brussels do not answer without thinking, that they listen to us.”

The Socialists’ plan is to “recapitalize the banks preventively” with 30 billion euros left over from European bailout funds of 60 billion, so that families and businesses can start borrowing again. “It needs to be discussed in the Eurogroup. If we do nothing, within 18 months we will be asking for this money to recapitalize the banks.” Rubalcaba reiterated his call for a national pact to drag Spain out of the crisis.