Spain Will Seek Eurozone Aid For Banks
Spain's finance minister has confirmed his country will ask for European financial aid for its ailing banking system.
Madrid insists the eurozone support for its banks is not a rescue, and not all banks need money.
Luis de Guindos told reporters the country has not yet made a formal loan request - but a statement from the eurogroup of finance ministers said they expected one "shortly".
The statement added that eurozone partners were "willing to respond favourably" to Spain's appeal and would agree to lend it up to 100bn euros (£81bn).
Madrid has said it wants to wait until June 21 for the publication of two independent audits of its banking system before it decides how much money is needed.
Both Mr de Guindos and Christine Lagarde, managing director of the International Monetary Fund (IMF), have said the amount of cash pledged to Spain should be enough to reassure the markets that the problem is now in hand.
European finance ministers will demand Spain carry out reforms in its financial sector in exchange for the financial aid - but no further austerity measures will be required.
The eurogroup said it recognises the major steps Spain has already taken towards restructuring its economy.
In a sign of how the the global financial machinery is finally grinding into action, the IMF has been invited to oversee the implementation of the deal.
Spain's acceptance of aid for its banks is a big embarrassment for prime minister Mariano Rajoy, who said just 10 days ago that the banking sector would not need a bailout.
But Mr Rajoy has admitted his government cannot fund the estimated 40bn euro (£32bn) bill to prop up the country's banks.
On Friday, the IMF rushed to publish its own analysis that said Spain's banks need at least 37bn euro (£30bn) to cope with the slump in property values.
European and IMF officials are reportedly keen to draw a line under speculation about Spain's future before next weekend's general election in Greece, which could see it leave the euro.
Spain is already facing growing opposition to austerity with the eurozone's highest unemployment rate.
Almost 25% of workers are out of a job - and the figure is above 50% among young Spaniards.
The stress tests carried out by the IMF showed that while Spain's top two banks - BBVA and Banco Santander - remain solid, the rest of its banking sector is struggling.
On Friday, US President Barack Obama urged Europe to act swiftly to tackle its banking crisis or pay a heavy price.
US Treasury secretary Timothy Geithner welcomed the Spanish bailout, calling it an important step toward financial union.
what do you think?
Europe/America is finished. They printing trillions of pounds just to stay afloat. While Russia, China, Brazil and India are trading big. Only a matter of time before the west collapses and will be at the mercy of the new powers.
A new world order beckons, don't worry China will give u a job mavis.
Mavis is wrong. Brazil dont depend of china..if you dont know the UK and USA owned a lot of millions of dollars to brazil..brazil dont need noone to survive..they have everything ..unlikely UK..USA need brazil products to survive..by the way brazil is getting richer and riher..they dont have money problems like Euro..
There are purpose built towns in China that were constructed because of high demand during China's economy boom. That are sitting empty because no one can afford them. China's economy isn't the huge rising star that our media makes it out to be. Granted they are a lot better off than Europe
It's a funny thing this 'economy'! Is it money just going around and around or is there actual new money or wealth or buying power? Countries like Brazil and India there governments dont have our bills for any social state support system. As they have alot of people thats alot of saving. I would not like to be a peon/peasant there! You are strictly on your own. Millions just live day to day. But of course they are not stupid and eventually wages rise and people want to buy cars and tv's and have some care and then we make trade agreements...you must look after your workers....
Mavis I am doing a course in rice picking. I advise u do the same. The futures bright.
Mavis, Perhaps if you learned how to spell the word TOKAMAK, they'd be more willing let you work on it.
wot did all the bailout countries do b4 they joined the euro + the common market it seems to me thats all they joined for we help the banks yet they evict ppl from homes wen they cant pay we should evict them ?
Can you write English?
40 bil is a lot, but then I've read on zerohedge/Reuters that the real fiqure could be nearer 400 bil. Except the euro liars don't want to frighten the tax paying masses with the truth, until of course they've been conditioned to being sytematically raped.
The Spanish Banks need a total of 100 billion. The Greeks have had 150 billion and need a further 150 billion We, the private sector, paid to our 2 banks RBS and LLoyds a total of 950 billion. We didnt pay it but the Government used our money to do it. Since 2008 those banks have paid huge salaries and billions in bonuses and now would like a further 500 billion from us. Our pay out is more than the entire Europes banks put together. We also pay 12.5 billion in overseas aid, and cut armed forces and police because the Coalition wants to give 98% of our money abroad.
Not more taxpayers money to give to greedy bankers. We need to look after this country come out of European union and send all immigrants home instead of them living on housing benefits and sending their money home doing nothing for our economy only bleed it dey
--------- and massive cuts in imports, starting with cars.
I suppose u have a point about no more taxpayers money to greedy bankers.u r right by saying that we should be looking afer this country.But u r v.wrong to say to send ALL immigrants home,b'cose they live on benefits.Certain indivuals YES.Most of us r completely opppsite work v.hard never lived on ANY BENEFITS in their lives.
Shirley the British under Winston churchills era had men and women of great working ethos. The new breed of British are the ones that live off the system. Wake up and smell the coffee. If all the immigrants left england trust me you would go under.
Again. What absolute bloody rubbish---Jimmy@Brighton
Again. What absolue bloody rubbish.---Jimmy@Brighton
The British only want the good jobs. Isn't that why u bought Indians and black people in the 60 and 70s, mavis I am surprised cause u seem like an intelligent woman where did u pick up this right wing attitude.
This comment has been removed for violations of our Terms and Conditions.
This comment has been removed for violations of our Terms and Conditions.
What absolute bloody rubbish. --Jimmy@Brighton
Well said Julian
shud ban euro go back 2 the old days stop bankers being greedy send home all the people who claim dole and then send there money back 2 there country let us sort uk out
Big question is, does this mean that the Spanish banks will owned by the EU? The US wants Europe to have fiscal unioin - what business is it of theirs? Frankly, I suspect that the Spanish banks will need a lot more money than the figures mentioned so far, and that they are probably in an even worse state than Lloyds TSB and RBS. It is about time the leaders of the Euro zone countries grasped the nettle. The Euro has been a complete failure because it was a political tool designed to bring the concept of a United States of Europe to reality, which is why the rules for entry were ignored. The Germans know that without it, their exports would be uncompetitive, which is why they won't let the Mediterranean countries float free.
Remember we are British!!!!!! No time to look back take take take.back
Can't they just use quantitative easing like the bank of England can? Because from the sounds of it all that is is printing money. So can't the powers that be just print enough money to clear the debt. Because lets face it this debt is BS and only exists in cyberspace.
What is Ali Babbling on about? Ali, you generalisations about the British is just as racist as the racists you rail against. The post-war immigrants came over AT INVITATION because there was a labour shortage due to loss of life and limb and low birth rates due to the war AND because of the rebuild of houses and investments in industries. Some bosses tried to use immigrant labour to undercut wages which helped fan the flames of racism. But, in the main, most immigrants worked well alongside the fellow British workers. They became an integral part of our society and communities, enriching our country. Many black and white workers have worked alongside each other and fought beside each other against exploitative bosses and against racism generally. White working people have more in common with black working people than we do with any of the political elite or members of the monarchy. It's about CLASS not RACE.
As usual Mavis, you reply with a venomous put down and no argument whatsoever. What is in Chris's post you consider garbage. Please elaborate for once if you're capable of that.