Spain borrows up to 100B euros from Euro zone
On Saturday, Euro zone finance ministers agreed to lend Spain up to 100 billion euros, $125 billion, to save its teetering banks and Madrid said it would specify precisely how much it needs once independent audits report in just over a week, according to Reuters. After a two and a half hour conference call with 17 finance ministers, which several sources say was intense, the Eurogroup and Madrid said the amount of the bailout would be sufficiently large to expel any doubts.
A Eurogroup statement said, “The loan amount must cover estimated capital requirements with an additional safety margin, estimated as summing up to 100 billion euros in total.” Spain wants aid for its banks, but will not specify the exact amount until two independent consultancies, Oliver Wyman and Roland Berger, deliver their assessment of the banking sector’s capital needs some time before June 21. At a news conference in Madrid, Economy Minister Luis de Guindos said, “The Spanish government declares its intention to request European financing for the recapitalization of the Spanish banks that need it.” The bailout for Spain’s banks, caused by bad debts since the property bubble burst, will make it the fourth country to seek assistance since the beginning of Europe’s debt crisis. Greece, Ireland, and Portugal were rescued by European bailouts.