NICOSIA - Spain, deflecting pressure to spell out whether it needs more European financial support, told euro zone finance ministers on Friday it will set clear deadlines for structural economic reforms by the end of the month. Madrid's borrowing costs have fallen sharply since the European Central Bank said it was ready to buy Spanish bonds but big borrowing needs before the year-end and a deepening recession mean most analysts and policymakers believe it only a matter of time before it will require help. "We will adopt a new set of reforms to boost growth... It will be in line with the recommendations of the European Commission," Economy Minister Luis de Guindos told journalists after meeting his peers in Cyprus. A detailed timeline would be attached. However in Madrid, Deputy Prime Minister Soraya Saenz de Santamaria said the cabinet would simply issue a new calendar on Sept. 28 for enacting reforms announced in July. Her comment appeared to undercut De Guindos' pledge in another example of communications problems that have dogged Spain's government. The timing suggests a request for aid may not be far away, although de Guindos insisted the package was unrelated to any possible bailout terms. Several euro zone officials have speculated Spain could apply in time for the next meeting of euro zone finance ministers on Oct. 8. Madrid has so far resisted austerity conditions that go beyond the EU policy recommendations it is already implementing, while north European creditors led by Germany are adamant that any aid would come on tougher terms. The ECB has said a request for help from the euro zone's bailout fund, and the negotiation of strict, time-bound policy conditions and monitoring, is essential to trigger its bond-buying intervention in the secondary market. ECB President Mario Draghi, who attended the Nicosia talks, stressed any bond-buying would require strict conditionality. Spain's 2013 budget and a detailed audit of the capital needs of its banking sector are both due on Sept. 28. For the first time in months, ministers met at a moment when market pressure for immediate action to solve the sovereign debt crisis is easing, rather than mounting. The ECB's announcement that it could buy unlimited amounts of Spanish bonds, should it agree a programme with the euro zone bailout fund, brought Spanish 10-year bond yields down from 7.64 percent on July 24 to 5.62 percent on Thursday. Italian yields have fallen to around 5 percent and the euro rose above $1.30 after the U.S. Federal Reserve announced a new programme of asset purchases to support the economy. That increases the temptation for Spain, and EU paymaster Germany, to try to get by without an assistance programme that would be politically difficult in both Madrid and Berlin. Each time market stress has eased in the nearly three-year crisis, German leaders have said they see no urgent need to act. "There is no more room for complacency than there was six months ago, but we are moving in the right direction," European Economic and Monetary Affairs Commssioner Olli Rehn cautioned.
