Spain in talks to bring down loan costs

Spain is negotiating with the eurozone over conditions for international aid to bring down its borrowing costs, though the country has not made a final decision to request a bailout, three sources with knowledge of the matter said yesterday.

The favoured option being discussed is that the existing European rescue fund, the EFSF, would purchase Spanish government bonds at primary auctions while the European Central Bank would intervene in the secondary market to lower yields, the sources said.

No specific figure for aid has been discussed in the talks, which started several weeks ago, one of the sources said.