IMF visits Spain amid Bailout fears

A delegation from the International Monetary Fund (IMF) has travelled to Spain amid widespread speculations that the debt-ridden country might need an international bailout.

The delegation will visit Spain on Monday in order to conduct a routine study on the country's financial system as part of an annual global report, AFP reported on Sunday. "An IMF staff team is currently traveling to a number of countries as part of its preparatory work on the April 2011 Global Financial Stability Report -- the IMF's regular report on global financial conditions," an unnamed IMF spokeswoman said.

The visit comes as rattled nerves across the euro zone are still jittery over the prospect of a bailout for Spain as the country struggles to rein in its ballooning budget deficit and its highest unemployment rate across the euro zone.

Some analysts believe the country might yield to outside pressure to finally apply for a Greek-style international bailout package from IMF and the EU.

However, IMF ruled out speculations that the delegation would discuss the issue of Spain's economic crisis and the need for financial help during the visit.

"Spain is among a number of countries" that the team is to visit, said the spokeswoman, adding that "the team will not discuss Spain's economic policies."

Spain's Prime Minister Jose Luis Rodriguez Zapatero has pledged to slash the country's deficit from 11.1 percent of economic output in 2009 to 9.3 percent in 2010 and 6.0 percent in 2011.

The global financial crisis, which broke out in early 2007, dealt a devastating blow to Greece and Ireland last year, forcing the EU and the IMF to pay the debt-ridden countries 110 billion euro and 85 billion euro respectively as part of bailout packages to salvage their fragile economies.

Concerns are running high that the need for international financial aid could be replicated in other indebted euro zone countries such as Portugal, Belgium and Spain.

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