Spain asking for a “total emergency bailout” of 300 billion euros from Germany, according to Reuters

Reuters, the news agency, has claimed that Spain has secretly asked Germany to prepare a 300 billion euros bailout package to rescue the state after a number of regions within Spain have claimed bankruptcy and asked for bailouts.

Citing a “senior government official”, the news agency said that:

Spain has for the first time conceded it might need a full EU/IMF bailout worth 300 billion euros ($366 billion) if its borrowing costs remain unsustainably high, a euro zone official said.
Economy Minister Luis de Guindos brought up the issue with German counterpart Wolfgang Schaeuble in a meeting in Berlin last Tuesday as Spain’s borrowing costs soared past 7.6 percent, the source said.

If needed, the money would come on top of the 100 billion euros already agreed to prop up Spain’s banking sector, stretching the euro zone’s resources to breaking point, and Schaeuble told de Guindos he was unwilling to consider a rescue before the currency bloc’s ESM bailout fund comes on line later this year.

“De Guindos was talking about 300 billion euros for a full program, but Germany was not comfortable with the idea of a bailout now,” the official told Reuters.

“Nothing will happen until the ESM is online. Once it is operational we will see what the borrowing costs for Spain are and maybe we will return to the question,” the official said.

However, the Spanish government has strongly denied that this has happened, saying via a spokeswoman to Reuters that “We strongly deny any such plan. This possibility (of a 300-billion-euro rescue for Spain) has not been looked at and has not been discussed.”

However, it appears that this afternoon Germany has also responded to the rumours, with German finance minister Wolfgang Schauble telling reporters that he has given his full backing to the European Central Bank to do “whatever it takes” to save the euro.

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