Germany: Spain doesn't need sovereign bailout

Spain's banks -- hit hard by a burst real-estate bubble -- are to receive rescue loans of up to (EURO)100 billion ($122 billion). But persistently high borrowing rates for Spain in bond markets have fed worries about the possibility the government itself might need a rescue like those of Ireland and Portugal.

"There is absolutely no reason to speculate, beyond this (bank aid) application, about a comprehensive aid program for Spain," German Finance Minister Wolfgang Schaeuble was quoted as telling the daily Rheinische Post.

"Spain really does not need that," he added.

Germany's Parliament is due to vote on the bank rescue package Thursday. It is meeting in a special session because lawmakers' summer break started at the end of June and they weren't scheduled to reconvene until Sept. 11.

"There are no drawbacks for us" in helping Spanish banks, Schaeuble said in a separate interview posted Wednesday on the government's YouTube channel. "I am completely sure that Spain will always be able to fulfill its obligations ... we are buying Spain time on the markets until the nervousness has calmed down."

Chancellor Angela Merkel said after meeting her Thai counterpart that she was optimistic of securing a wide parliamentary majority for the Spanish bank rescue. The two main opposition parties have joined her center-right government in supporting other eurozone rescue plans recently.

Asked whether she was sure it was the only time Parliament would have to meet during the summer break, Merkel said she doesn't have "prophetic gifts, but there are no indications whatsoever of further special sessions."