Spain Asks for $125 Billion Bank Bailout as Crisis Worsens
By Charles Penty, Emma Ross-Thomas and Ben Sills - Jun 9, 2012 9:27 PM GMT
Spain asked euro-region governments for a bailout worth as much as 100 billion euros ($125 billion) to rescue its banking system as the country became the biggest euro economy so far to seek international aid.
“The Spanish government declares its intention of seeking European financing for the recapitalization of the Spanish banks that need it,” Economy Minister Luis de Guindos told reporters in Madrid today. A statement by euro-region finance ministers said the loan amount will “cover estimated capital requirements with an additional safety margin.”
Just seven months after winning a landslide victory, Prime Minister Mariano Rajoy was forced to abandon his bid to recapitalize Spanish banks without recourse to external help as a deepening recession forced lenders to recognize spiraling losses. Today’s move means Spain has a firewall in case the Greek election on June 17 unleashes a fresh round of market turmoil.