Spain to ask for a lifeline for their banks; could amount to 100 billion euros
The fourth largest economy in the Eurozone is likely to ask for a bank rescue during a European finance minister conference call today.
Photo/Gilad Rom via wikimedia commons
If Spain does request funds to prop up their ailing banks, they will be the fourth country to seek bailout assistance in the 17-member Euro zone.
Although there has not yet been a formal request from Madrid, Reuters reported just hours ago that the bailout could amount to as much as 100 billion euros.
A new report from the International Monetary Fund estimated Spanish banks need a recapitalization injection of at least €40 billion ($50 billion) following a stress test it performed on the country’s financial sector.
According to Ana Pastor, Spain’s Development Minister, “What we’re working on at the moment is the recapitalization of the financial entities that need it, nothing else.” She did not mention the expected bailout request.
Reuters reports that Spain has already spent 15 billion euros bailing out small regional savings banks that lent recklessly to property developers.
Spain’s biggest failed bank, Bankia, will cost 23.5 billion euros to rescue and its shareholders have been wiped out.
If requested and approved, the world’s 12th largest economy would would join Greece, Ireland and Portugal in receiving a European financial rescue.
