It’s finally official – Spain has formally requested a bailout package for its ailing banks.
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The country asked for 100 billion euros from its eurozone partners – enough, says the Economy Ministry, to cover all the banks needs plus a little extra.
An EU Commission spokesman said the request would help Spain balance its books. Last week an independent audit revealed the country’s banks need between 51 billion and 62 billion euros in extra capital to survive.
Spanish bond yields – already at euro era highs – started to rise again after the announcement.
And some analysts say the request has come too late.
“It’s been about four years behind Ireland and Ireland is still suffering from the actual house prices falling,” said Brenda Kelly, Senior Strategist at CMC Markets. “We saw the CSO numbers coming out today that they have fallen 15% year on year from last May. So Spain’s house prices are probably set to fall that bit further as well. And this 100 billion may just be a flash in the pan.”
The EU hasn’t yet said how much it will lend Spain but some analysts now fear a sovereign bailout is the inevitable next step.