Friday, June 8, 2012
Spain poised to request EU bank aid
Spain is expected to ask the euro zone for help with recapitalising its stricken banks at the weekend, EU and German sources said on Friday, becoming the fourth country to seek assistance since Europe's debt crisis began.
Five officials in Brussels and Berlin said the finance ministers of the single currency area would hold a conference call on Saturday morning to discuss a Spanish request for aid, although no figure on the assistance has been set.
The Eurogroup, which comprises the 17 euro zone states, will issue a statement after the call, which is scheduled to take place before midday (1000 GMT), the sources said.
"The announcement is expected for Saturday afternoon," one of the EU officials said.
The dramatic move comes after Fitch Ratings cut Madrid's sovereign credit rating by three notches to BBB yesterday, highlighting the Spanish banking sector's exposure to bad property loans and to contagion from Greece's debt crisis.
"The government of Spain has realised the seriousness of their problem," a senior German official said.
He added that an agreement had to be reached before a Greek general election on June 17 which could cause market panic and increase the possibility of Athens leaving the euro zone if parties opposed to the terms of an EU/IMF bailout win.
The EU and German sources spoke on condition of anonymity due to the sensitivity of the matter.
Five officials in Brussels and Berlin said the finance ministers of the single currency area would hold a conference call on Saturday morning to discuss a Spanish request for aid, although no figure on the assistance has been set.
The Eurogroup, which comprises the 17 euro zone states, will issue a statement after the call, which is scheduled to take place before midday (1000 GMT), the sources said.
"The announcement is expected for Saturday afternoon," one of the EU officials said.
The dramatic move comes after Fitch Ratings cut Madrid's sovereign credit rating by three notches to BBB yesterday, highlighting the Spanish banking sector's exposure to bad property loans and to contagion from Greece's debt crisis.
"The government of Spain has realised the seriousness of their problem," a senior German official said.
He added that an agreement had to be reached before a Greek general election on June 17 which could cause market panic and increase the possibility of Athens leaving the euro zone if parties opposed to the terms of an EU/IMF bailout win.
The EU and German sources spoke on condition of anonymity due to the sensitivity of the matter.
COMMENTS >
Merkel: EU ready to act as Spain downgraded
Director: Orlando Mario Vignatti - Edition No. 3675 - This publication is a property of NEFIR S.A. - Issn 1852 - 9224 - Te. 4349-1500 - Paseo Colón 1196, (C1063ACY) CABA