Spain to get aid from EU on July
European governments will jump-start as much as 100 billion euros ($123 billion) in emergency loans to shore up Spain’s banks and may move the costs off the Spanish government’s balance sheet to shield the euro region’s fourth- largest economy from the debt crisis, the Bloomberg reports.
Spanish equities and bonds gained after finance chiefs agreed to make available 30 billion euros by the end of this month. The goal is to eventually use the euro-area bailout fund to recapitalize banks directly instead of saddling the government with the debts.
The initial cash will “be mobilized as a contingency in case of urgent needs in the Spanish banking sector,” Luxembourg Prime Minister Jean-Claude Juncker said early today in Brussels after chairing a nine-hour meeting of euro-region finance ministers. The program “will succeed in addressing the remaining weakness in the Spanish banking sector.”