The reports and expectations have been confirmed today. Spain requested aid to shore up its ailing banking sector as the economy minister confirmed the news to a press conference after a conference call with euro area finance ministers.
Economy Minister Luis de Guindos told a press conference that they will seek a bailout for the banks and that the terms will be “much more favorable” that what Spain would have to endure if they went to financial markets to finance the bailout for the banks.
The Eurogroup statement on Spain said that they “support the efforts of the Spanish authorities to resolutely address the restructuring of its financial sector”. They said that they are informed that Spain will make a formal request and they will respond favorably and the assistance would be provided by the EFSF/ESM for the recapitalization of banks.
The statement said that the loan will cover the estimated capital requirements and with additional safety margin and expect that it will sum up to 100 billion euros in total.
The statement said that once the formal request is made an assessment should be provided by the Commission in cooperation with the ECB, EBA and the IMF.
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