Spain get 100 billions euros in rescue package

Spain is to get up to 100bn euros ($125bn; £80bn) in loans from eurozone funds to try to help shore up its struggling banks.

The move was agreed at an emergency meeting of eurozone finance ministers after a conference call on Saturday.

Make no mistake – this is a rescue of the Spanish state, but in a roundabout way to reassure the common investor. The State can’t afford to bail out its banks, and so has had to ask for a rescue.

Luis de Guindos (Spain’s Economy Minister ) said his country would shortly make a formal request for assistance.

Spain was keen to ensure that any assistance went directly to its banks, rather than to the central government. As a result, the loans will go to its bank restructuring agency, called FROB. But this would still considered state debt, Mr de Guindos said.

The Eurogroup said it “considers that the Fund for Orderly Bank Restructuring, FROB, acting as agent of the Spanish government, could receive the funds and channel them to the financial institutions concerned. The Spanish government will retain the full responsibility of the financial assistance”.

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