Spain has time, Greece doesn't

Berlin Oct.30, stock trade .- Spain might have the luxury of time to delay a request for bailout funds but the timetable for Greece is more urgent, according to European Central Bank (ECB) policy maker Ewald Nowotny.

Getty Images European Central Bank

Reiterating his view that Spain does not need to request immediate aid, Nowotny told CNBC that it was no surprise that Spain was delaying any credit request.

“[A Spanish bailout] is a decision that has to be taken by the Spanish government. As far as I can see… there is no need [for a bailout] as the government is fully financed until the end of this year.”

Spanish Prime Minister Mariano Rajoy continues to deny that his country will sign up to the ECB’s proposed sovereign bond-buying program — called Outright Monetary Transactions (OMT) — as it would mean that Spain would have to agree to strict conditions.

“If you go for OMT, this is a program with very strict conditions, but as long as you are not in this program you are not under these conditions. I could imagine that this is one of the aspects that is on the minds of the Spanish government,” Nowotny said.

One in four Spaniards is unemployed and figures released on Monday showed that retail sales have dramatically fallen from a year ago as a recent hike in value-added tax (VAT) deters shoppers. More bad news was released on Tuesday morning as data revealed that gross domestic product (GDP) fell for a fifth consecutive quarter.

Nowotny, however, remained optimistic about Spain’s economy. He said it was hard to determine when and if Spain would apply to the ECB’s bond buying scheme to help lower its debts.

(Read More: Spain, Italy Reject Bailout Calls as Political Risks Rise)

“It is very difficult to say… the economic perspective is improving, the finance perspective is improving. Nobody can make serious forecast for 2013. At least from my point of view, I understand the government wants to keep a certain flexibility.”

Greece Doesn’t Have Much Time

Nowotny was less sanguine about Greece’s near-term prospects, however, arguing that there was a greater sense of urgency to find funds for Greece by mid-November.

The heads of the International Monetary Fund, World Bank, OECD and International Labor Organization are expected to try to convince German Chancellor Angela Merkel at a meeting on Tuesday that Greece needs debt relief to avoid intensifying the country’s crisis. ... Continue to read.

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