BRUS­SELS-In a dra­mat­ic turn­around, a se­nior of­fi­cial for the In­ter­na­tion­al Mon­e­tary Fund yes­ter­day re­tract­ed an ear­li­er com­ment that the IMF could in­ter­vene in bond mar­kets to sup­port strug­gling Italy and Spain. "The fund can on­ly lend its re­sources to coun­tries, and can­not use these re­sources to in­ter­vene in bond mar­kets di­rect­ly," An­to­nio Borges, the head of the IMF's Eu­rope pro­gramme, said in a state­ment. "Any al­ter­na­tive lend­ing modal­i­ties to what we do now would re­quire a dif­fer­ent le­gal struc­ture" for the IMF, the state­ment con­tin­ued, adding that such changes had not been dis­cussed with the fund's mem­bers.

Ear­li­er yes­ter­day, Borges had said at a news con­fer­ence in Brus­sels that the IMF could pos­si­bly in­vest along­side the eu­ro­zone's bailout fund to help Italy and Spain. Such a move would have sig­ni­fied a com­plete­ly new role for the IMF, which has been a key con­trib­u­tor to the bailouts of Greece, Ire­land and Por­tu­gal. So far that help has on­ly come through di­rect loans to the bailed out coun­tries and not through in­ter­ven­tion on the bond mar­ket.

AP