Spain formally request EU’S bailout

25.06.2012 20:33
Spain formally request EU’S bailout

YEREVAN, June 25, /ARKA/. Spain formally requested a bailout for its banks as it negotiated details of the aid, including which European rescue facility would be used for the 100 billion-euro ($125 billion) lifeline, according to news agencies.

Economy Minister Luis de Guindos sent the letter today to Jean-Claude Juncker, head of the group of euro-region finance ministers, the Madrid-based ministry said in an e-mailed statement. A memorandum of understanding will be finished before July 9, when those ministers hold their next meeting.

Spain agreed to the bailout after a conference call with euro-region finance ministers on June 9. Spanish banks may need as much as 62 billion euros to withstand a worst-case economic scenario, studies by two consulting firms hired by the government showed on May 21.

Those studies, and a report by the International Monetary Fund showing lenders needed at least 37 billion euros of additional capital, should be taken into account as a “starting point” for the memorandum of understanding, de Guindos said in the letter. It is still to be decided whether the temporary European Financial Stability Facility or the European Stability Mechanism, the successor fund due to come into effect next month, will be used.

“The choice of specific instrument that will be used for this aid will take into account the different options available now and those that may be decided on in the future,” he said in the letter, according to the e-mailed statement.

Spain is also pushing for greater integration of banking supervision and deposit guarantees in the 17-nation euro region. De Guindos last week said a full-scale banking union is “a possibility” and will be discussed at a summit of European leaders on June 28-29. -0-

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