The European Central Bank (ECB) has denied a report in Het Financieele Dagblad that it and the International Monetary Fund (IMF) are negotiating a 300bn euro bailout for Spain. The newspaper cited sources close to the talks.

According to the Dutch newspaper, the ECB wants the IMF's participation in order to make sure Spain complies with the strict conditions, requiring spending cuts and economic reforms.

"The ECB is working on an outline for a new bond purchasing program that would require close IMF supervision," the paper notes.

The news hit the wires as the group of European Union finance ministers, known as Ecofin, holds an informal two-day meeting in Nicosia, Cyprus. Spain is on the agenda and the officials are expected to discuss the bailout of the peripheral country and the possible conditions to the funding that would be imposed.

However, the country's Minister of Economy Luis De Guindos, already said this morning that no new conditions would be imposed if Spain requested that the ECB purchase its debt under the Outright Monetary Transaction program announced last week by the central bank's president Mario Draghi. "What Spain needs to do is reduce its deficit according to the terms of the agreement that we have made. This involves cutting excessive spending and then implementing the economic reforms outlined in the European Semester. That is the compromise agreed to both by Spain and our European partners," De Guindos explained.

He added that Spain "continues working" on its reform program and stated that "there will be important announcements in the following days."

MG

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