Eurozone finance ministers reported that they have agreed to lend up to 100 billion euros or $126 billion to Spain to assist the countries’ wavering banks. Madrid has said that it will know precisely how much money it will need once it in in receipt of two independent audit reports, expected in a little over a week.
Following a 2 ½ hour conference call between the 17 finance ministers, which was described as being heated, Madrid and the Euro-group both said the monetary amount of Spain’s bail out would be large enough to discard any doubts.
A statement issued by the Euro-group said that the amount of the loan has to be enough to cover estimated capital requirements,with an additional safety margin, estimated to be a total of 100 billion euros.
Spain wants financial aid for its banks, but won’t specify an exact amount until after the completion of two audits has been completed – one by Roland Berger and the other by Wyman – which are expected to be delivered before June 21.
Economy Minister, Luis de Guindos said during a Madrid news conference that the amount of money needed to recapitalise Spanish banks will be manageable, and the requested funds will sufficiently cover any of Spain’s financial needs.
A Spanish bank bailout, will make Spain the fourth country to get assistance since the beginning of Europe’s debt crisis.
Between the rescue of Portugal, Greece, Ireland, and now Spain, the Eurozone has committed about 500 billion euros to finance the bailouts.
Although Washington, welcomed the recent announcement, it is concerned that the eurozone crisis may drag down the U.S. economy during the election year.