‘Inaccurate’ to compare Spain to Portugal: OECD

The head of the OECD said Thursday it is “inaccurate” and “unfair” to compare the debt problems of Spain with Portugal, after Lisbon announced that it needed a European financial bailout.

“Spain will not have the same problems Portugal is facing,” Angel Gurria said in Budapest, where European Union finance ministers are gathering as Lisbon prepares to lodge a formal demand for aid.

Gurria said Madrid had been addressing its problems for some time and that they were “never the same” as those in Lisbon.

It was “completely inaccurate, totally unfair” to lump Spain and other EU states with high debt levels, in alongside Portugal, Ireland and Greece, he said.

“Spain, Italy, the United Kingdom never should have been talked about” in terms of needing a bailout, Gurria said.

Talk of debt rescues “should have stopped with Ireland” in December last year, he added.

Portugal’s government will “formally” request financial assistance from EU partners later in the day, a government spokesman said in Lisbon following a cabinet meeting Thursday.

Meanwhile, Spain strove to distance itself from Portugal’s debt woes, insisting it would never ask for a similar bailout of its battered economy.

Analysts have said Portugal could require a package worth 70 billion euros (100 billion dollars), compared with 85 billion euros for Ireland and 110 billion euros for Greece.

Gurria noted in Budapest that there “should not be a stigma” attached to calling for a bailout, and blamed dysfunctional markets that were “ill-informed” and “rating agencies making things worse all the time.”

A series of downgrades of Portugal’s credit-worthiness made Lisbon’s latest foray onto money markets on Wednesday so costly its government decided it was better to turn to its euro currency partners, like Dublin and Athens before it.

Gurria, however, emphasised the positives.

“There is life after debt,” he said.