Spain asks for banking aid
June 25, 2012
Spain on Monday officially asked eurozone partners to help bail out its ailing banks, which had been exposed to the country's real estate crisis.
Spanish Economy Minister Luis de Guindos sent a letter of request to Eurogroup President Jean-Claude Juncker, formally asking for financial assistance, EFE news agency reported.
It said no new figures were included in the letter. But reports by two independent consulting firms last week said Spanish banks could need up to 62 billion euros ($77.64 billion) to survive a severe three-year financial slump. Eurozone partners had indicated earlier they were willing to even grant a rescue loan of 100 billion euros.
Details up for negotiations
The terms of the banking sector bailout will yet have to be negotiated. The priority for Madrid is a low interest rate. Spanish Foreign Minister Jose Manual Garcia-Margallo said in Luxembourg the government was also hoping for the longest possible reimbursement period for the loan.
Economy Minister Luis de Guindos had earlier spoken of an interest rate between three and four percent and of a refunding period longer than 15 years.
There's also the possibility of the eurozone injecting the rescue money directly into Spanish banks rather than passing it through the government. Madrid hopes favorable terms for the loan will help dispel market concerns over mounting debt levels.
hg/ng (dpa, AFP)