Spain seeks assistance for ailing banks
After a three-hour video conference with fellow Eurozone finance ministers, Spanish Economy Minister Luis de Guindos indicated that his country would become the fourth nation to request assistance since Europe's debt crisis broke out more than two years ago.
"The government declares its intention to solicit outside financing," De Guindos told reporters at a hastily organized news conference in Madrid.
He did not indicate how much money Spain was seeking and was careful to call the package "financial assistance," avoiding the word "bailout."
Finance ministers from the 17 nations that use the euro were expected to issue a statement later Saturday specifying the amount of aid being offered to Spain.
De Guindos said the money would be provided on terms "much more favorable" than what Spain is able to raise on financial markets on its own. For weeks, Spain's borrowing costs have been hovering near levels that sent Greece, Portugal and Ireland into bailouts.
While Spanish government debt is relatively low compared to those nations, Spain's banks are deeply indebted, weighed down by bad real estate loans left over from the housing bubble. The fear is that without outside assistance, Spain's banking sector might sabotage Spain's entire economy, and destabilize the Eurozone as a whole.
-- Lauren Frayer
Photo: Spanish Economy Minister Luis de Guindos gestures during a news conference in Madrid on Saturday. Credit: Pedro Armestre/AFP