Spain to Seek Europe’s Help in Rescuing Banks
Spain agreed on Saturday to accept a European bailout to try to stabilize its cash-starved banks, following increasingly desperate calls from world leaders to accept the money before Greek elections next week that they fear could cause havoc in the markets.
European ministers offered Spain up to 100 billion euros, or $125 billion, on Saturday according to a euro zone official speaking on the condition of anonymity, but Spanish officials did not indicate how much they would accept.
At a news conference after European finance ministers met Saturday, Luis de Guindos, the Spanish economy minister, said in Madrid that the government had requested emergency financing for its banks.
Mr. de Guindos insisted that Spain should not be seen as the fourth euro economy requiring a bailout — after Greece, Ireland and Portugal — since the money would be used only to recapitalize banks.
“This has nothing to do at all with an absolute bailout,” he said “It is financial support aimed and given to the Spanish bailout fund and the Spanish bailout fund will inject this capital to those Spanish institutions that require it as stated by the International Monetary Fund.”
Mr. de Guindos said that the terms of the emergency loan would be “very favorable” and would be set in coming days, but he said that “the amount allows us to have an ample safety margin,” in terms of covering any other unexpected problems among Spain’s weakest banks. A loan of 100 billion euros is expected to over estimated capital requirements for the banks and provide an additional safety margin.