Euro Finance Chiefs Give Final Approval to Spain Bank Rescue
(Updates with memorandum of understanding starting in ninth paragraph. See TOP CRIS for more debt-crisis news.)
July 20 (Bloomberg) -- Euro-area finance ministers gave final approval to as much as 100 billion euros ($122 billion) of bank aid for Spain, putting Greece back on the front line of the bloc’s crisis-fighting agenda.
The decision paves the way for the European Financial Stability Facility to raise 30 billion euros “which can be used in case of urgent unexpected financing needs,” according to a statement from the group of 17 ministers. Banks will be able to receive payments via the Spanish government’s bank-rescue fund after submitting approved restructuring plans.
“Providing a loan to Spain for the purpose of the recapitalization of financial institutions is warranted to safeguard financial stability in the euro area as a whole,” the ministers said in the statement after a conference call today.
The ministers didn’t decide on other aspects of their quest to tame the debt crisis now in its third year, such as how they’ll make sure Greece can make a 3.1 billion-euro bond payment in August or tackle rising borrowing costs in Italy. Luxembourg’s Jean-Claude Juncker, who heads the group of euro finance chiefs, said earlier this month that the single-currency bloc would find a technical solution to help Greece in August, before the next scheduled meeting of ministers in September.