EU Leaders to Jumpstart Loans to Spanish BanksJuly 10, 2012 @ 8:17 AM EST
Europe Update: EU to Jumpstart Loans to Spanish Banks
Bloomberg is reporting that European governments will jumpstart as much as €100 billion in emergency loans to shore up Spain's banks.
In addition, the ministers agreed early on Tuesday to grant Spain’s leaders an extra year (until 2014) to reach its deficit reduction targets in exchange for further budget savings. They also set the parameters of an aid package for Spain's ailing banks.
Bloomberg says that the finance ministers agreed to make available €30 billion by the end of the month.
Officials are clearly trying to reassure the markets with the move. "There's no emergency here, there's a clear path towards stabilization," Luxembourg Finance Minister Luc Frieden said of the measures agreed for Spain. "The markets have to realize that the money is there, more money than is necessary."
However, not everyone is jumping for joy about the plan. The WSJ noted that German Finance Minister Wolfgang Schäuble said that even once the Eurozone's bailout fund has been authorized to directly recapitalize struggling banks, the lenders' host government should retain final liability for any losses. The article said Schäuble’s view clashed with those of other officials, who insisted that banks' host states wouldn't have to guarantee any support from the bailout fund.
Stock futures in the U.S. as well as European markets have improved on the news.
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Other stories on Europe to review:
Germany's Industrial Production Up in June
Bank of England Launches 3rd Round of QE
European PMI's Show Some Improvement
EU Leaders Announce Measures To Ease Crisis
Greece Has Formed a Government
Eurozone ZEW Index Continues to Decline
German ZEW Index Slides in June
Greek Voters Support Euro and Bailout
Spain Downgraded at Moody's
Eurozone Industrial Production Declines
- Spanish Banks To Get 100 Billion Bailout
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