Eurozone Bails Out Spain with $125 Billion?
region’s debt crisis more than two years ago with a request for as much as 100
billion euros ($125 billion) to rescue its banks.
Prime Minister Mariano Rajoy, who as recently as May 28 said he wouldn’t seek
a bailout, characterized the deal as a credit line for banks and an endorsement
of his policies. He spoke to reporters today in Madrid before flying to Gdansk,
Poland, for a soccer match between the national team and Italy.
“The 100 billion euros is the number that we were looking for so I’m
cautiously optimistic,” Olly Burrows, credit analyst at Rabobank International,
said in a telephone interview from London. “We still have to find a solution to
the sovereign debt crisis: it’s not done yet and we still have to press on with
the task of uniting Europe.”
Just seven months after winning a landslide victory, Rajoy was forced to
abandon his bid to recapitalize Spanish banks without external help as the
Treasury’s access to capital markets narrowed. Foreign investors slashed their
holdings of Spanish debt amid concern banks’ bad loans may overwhelm public
finances, driving borrowing costs to near euro-era records.
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