The bailout conditions

After he received criticism for equivocating in Mario Monti's press conference held last Thursday, Mariano Rajoy has taken a big step forward by saying that now he's not going to rule out asking for the bailout that the European Central Bank (ECB) has offered Spain. The conditoins of the bailout would depend the unorthox monetary policy measures that will come out of the ECB's next advisor strategy meeting.

Rajoy has put the ball back in Draghi's court and has adopted a similar position to the Italian Prime Minister, Mario Monti. Rajoy's small reversal of opinion signifies a major step in clarifying his plan for Spain's future. He should have conveyed this plan more quickly last Thursday and made the most of the international fallout from the statements that he made in the press conference. That the stock market rebounded 6% and the risk premium dropped to 542 basis points is proof enough of this.

Spain is holding private conversations with Germany to discuss the conditons and limitations of a possible bailout, which give weigh to the statements that Rajoy has made about the subject. Once again Rajoy stayed firm despite the multiple issues he is trying to deal with. One of them, the fiscal agreement that he's asking the Catalonia government to make, is nearing failure because Rajoy and team understand that Catalonia's problem does not stem from its financing strategy but in its falling revenues. The government has endured a critical week in the history of Spain -- with a spirit and enthusiasm that shouldn't be overlooked.