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Paul Hanna / Reuters
Spain's economic crisis includes protests like this one in Madrid on Friday, where people rallied against layoffs at Banesto bank.
Spain will seek financial help from its Eurozone partners but exactly how much won't be known until private audits are undertaken, the country's economy minister announced Saturday.
Earlier, European finance ministers discussed plans to offer Spain up to $125 billion (100 billion euros) in a bid to stabilize its banks -- and ease concerns over the even bigger European debt crisis. That amount was described as an upper limit, not an indication of what Spain would ask for.
After Spain's announcement, the Eurozone ministers issued a statement that they expected a formal request "shortly" and are "willing to respond favorably."
Spain earlier said it wanted to wait for two independent audits — due by June 21 — before deciding on whether to seek aid, and it was not clear if those audits were being stepped up.
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Spain had resisted asking for a bailout since previous ones for Greece, Ireland and Portugal came with demands for tax increases and spending cuts.
Economy Minister Luis de Guindos emphasized the aid would not come with "micro-economic conditions".
U.S. Treasury Secretary Tim Geithner issued a statement praising the "concrete steps on the path to financial union" for the Eurozone.
Investors and politicians have been increasingly concerned that Spain might not be able to find the money to prop its ailing banks by itself.
Spain warns time is short as G7 discusses eurozone crisis
A report from the International Monetary Fund estimated Spanish banks need a recapitalization injection of at least $50 billion following a stress test it performed on the country's financial sector. That report came out early Saturday, three days ahead of schedule, underscoring the urgency of the situation.
Officials said there had been a heated debate over the IMF's role in Spain's bank rescue, which Madrid wanted kept to a minimum. It will not provide any of the money.
In the end it was agreed that the IMF would help monitor reforms in Spain's banking sector, while EU institutions would ensure Spain stuck to its broader economic commitments.
Eurozone policymakers were eager to shore up Spain's position before June 17 elections that could push Greece closer to a Eurozone exit and unleash a wave of contagion.
Nonetheless, some analysts said financial markets might be calmed by the announcement when they reopen on Monday.
"The figure of up to 100 billion (euros) is more encouraging and pretty realistic; it's an attempt to cap the problem," said Edmund Shing, European head of equity strategy at Barclays.
"The issue, however, is there is still a lack of detail about where the money's coming from, which is crucial. The market will treat it with some caution until they see how it will be funded."
World Bank on Greece crisis: Spain and Italy could be next
The Eurogroup said the funds could come from either from a temporary rescue fund, the EFSF, or the permanent mechanism, the ESM, which is due to start next month. Finland said that if money came from the EFSF, it would want collateral.
EU sources said there was a preference to channel money to Spain through the ESM, rather than the EFSF. Under the ESM, an approval rate of 90 percent or less is needed to trigger aid, and the fund also has more flexibility in how it operates.
"That's why it's so important that the ESM ... be ratified quickly," German Finance Minister Wolfgang Schaeuble said.
Spain has already spent $20 billion bailing out small regional savings banks that lent recklessly to property developers.
Spain's biggest failed bank, Bankia, will cost $25 billion to rescue and its shareholders have been wiped out.
The race to resolve the banks' troubles comes after Fitch Ratings cut Spain's sovereign credit rating by three notches to BBB, highlighting the Spanish banking sector's exposure to bad property loans and to contagion from Greece's debt crisis.
It said the cost to the Spanish state of recapitalizing banks stricken by the bursting of a real estate bubble, recession and mass unemployment could be between $75-$125 billion. The higher figure would be in a stress scenario equivalent to Ireland's bank crash.
Greeks withdraw $894 million in one day
Italy could yet get dragged in too. Its industry minister, Corrado Passera, said the economic situation in Italy had improved since the end of 2011, but remained critical. "Europe was more disappointing than we had expected, it was less capable of tackling a relatively minor problem such as Greece," Passera told a conference.
While Spain would join Greece, Ireland and Portugal in receiving a European financial rescue, officials said the aid would be focused only on its banking sector, without taking the Spanish state out of credit markets.
That would be crucial to avoid overstraining the Eurozone's rescue funds, which would struggle to cover Spanish government borrowing needs for the next three years plus possible additional assistance for Portugal and Ireland.
Conditions in the plan would be related to the banks and would probably not add to the austerity measures and structural economic reforms that Spain's government has already put in place, EU and German sources said.
A "bailout lite" would help salvage Spanish pride. Spain is the world's 12th largest economy and No. 4 in the Eurozone. EU and German officials have cited national pride as a barrier to requesting a full assistance program.
The Associated Press and Reuters contributed to this report.
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How can anybody be surprised at what the House and Senate have been doing, when on day one McConnell declared their only agenda was to make Obama a one-term president?! The Repubs do not care how many people have to die from lack of access to medical care, how many children go to bed hungry every night, etc. Just get the non-white man out of the White House, while making sure nothing he proposes is ever passed, or even brought to an up-down vote in the Senate! In my view, the tea party idiots in the House and the Repub senators are guilty of TREASON--they are actively working against the best interests of the majority of the American people.
If anyone should be guilty of Treason it should be the worthless President you LOONS priase.
He is taking this country down little by little. Spending money like a drunk sailor. Time to Pay up!
weareinbereshape,
Sorry but the left wacco lies are not going to cut it any more. 1ST the senate is controlled by harry ried ultra liberal/ socalist . the republicans have tried to get bills voted on from budgets to heathcare and ried will not allow the bills to be voted on! As far as kids going to bed hungry if that is so it is only because the parents sold there food stamps to by drugs! The food stamp program includes 6 times as many people now than when Obama took office. By keeping the uneducated, poor and just plain lazy and stupid down and in need of government assistance Obama with some negative propraganda about republicans wanting to take welfair away from those in need guarentees himself some votes, (if he can get them to the polls) last election the socalist party rented buses and gave away cigaretts to take homeless to the voting booths!
Lastly if you want to create jobs you do not threaten to make unionization mandatory, make health insurance mandatory, raise taxes and keep passing endless regulations that make it hard to compete in the market place!! Remember Obama wanted to put a tax of 125 on a cow! Who does this hurt ? The poor the price of meat goes up and then Obama will blame the greedy farmers. Everytime Obama prints money the US dollar is worth less and less. This means (since every commodity is based on the dollar ) that the cost of everything goes up!! This is not rocket science! Who does it hurt The poor and the retired, the middle class with kids, ect. Obama claimes to be the only one helping them and he is the biggest problem, causing more financial hardships than anyone!!! But the uneducated and uninformed such as yourself keep right on writing BS like your post! If you want this fixed it is not the socalist way of Obama!!!
So lets see, The Euro is currently in trouble because Greece is defaulting and is in the process of dropping the Euro as it's currency. So tell me again how taking on another failing economy and giving them a 125 billion dollar bailout with no strings attached to do business any different than before and a currency that is already having difficulties is going to make the Euro stronger? This is a slow motion wrecking ball that is going to crash eventually. The question is how much effect will Europe's failing economy have on ours? We need to take steps to minimize the impact other economies have on ours when they fail to diminish the impact they have on the value of our currency and our ability do meet our own obligations.
Here comes Greece II. The banks will get their bailaout, the rich Spanards will pull their refunded investments, and leave it for the taxpayers (middle class) to pay the debt while the oppressive austerity measures are put into effect. Within a year the Spanish government will be replaced, Spain will default and the rich will smile while the economy collapses. The Euro is finished.
Pretty soon all these bailouts will need bailing out and implode on itself- where will it stop?
It isn't going to end - A dude wrote a book called Empire of Debt - he nailed it - soon we will go to a new global currency - in stages of course. I think this has all been planned -
Doesn't require genius to repair credit. Even with prefect credit borrowers are required collateral to borrow after a fixed amount.
Also a Conservative accountant that has many years of experience and discipline.
well, if you look at all the monies we have given away, from world war two and on. we all could be millionaires. start a war rebuild the country. looat the last two wars alone. not to forget arms and such. How about mexico we give them millions to fight drug lords yeah right. and those middle east countries. and 54 millionto the un emf fund but we can't help are own people. the very people that pay taxes that gov. sends over sea's. go fig. that
Bankers and corporations make billions off of wars. There will always be wars unless there is a change in government. NOBAMA 2012
@ Michael, change in government going to bring about a change in wars? How naive. Vote Romney for your change, and see what happens on the war front.
What dumbass people writing on MSNBC....wingnuts, right wingers, etc.
Michael-3569177
Funny, I thought it was the republicans that got us into all of the conflicts we are currently fighting in. Which war did Obama start?
The ineviatble cliff is near as we row a boat upstream without a paddle. The question is how much air can you blow into a balloon before it "POPS". How much debt can you have before you say stop ! We must stop going further in debt to pay debt and pay back our debt instead of going further in debt ./. How much QE can you do or BS people into before it becomes a quantitative joke. Ben passed the buck to Obama in the 4th quarter what will he do with the ball ?
When you're broke and can't pay your bills, you should borrow 125 billion. That should solve the problem.
Next it will be Italy and on and on and on and BEN knows what the banks are doing with all that QE he throws out there trying to jump start a bunch of liberal welfare experts sucking us dry !
The fallout from this will be One World Order, with a One World currency.
And for those of you who like to mock our President with that "socialism," label.
This New World Order will be socialisim allright. Stalin style. It will not be kind or gentle. It will be Hitler like. If you are sick, or a burden on society, you will be gone.
You all fell for it since Carter. We warned you, but you would not listen. It's time for you to repent, and worship God rather than a nation, and a flag.
A "bailout lite" would help salvage Spanish pride.//Tell Spain it ain't the same no more you can't just storm in with conquistadors and take what you want. Grab a shovel ehh ! Spread the wealth back fired there aint enough to go around do the math first before you make the promises of banker heaven or utopia. Obama offered us Obamacare now it is an insult to think we almost fell for it . The world is a ghetto don'T you know ?
...viewed recently on Craigslist:
European fools seek rathole for $125 Billion...
To the EU, "just say no." The days of giving it 50% effort for 35 hours a week with six weeks of vacation and thinking you're entitled to retirement at 50 are over. These spoiled europeans need to get a work ethic and stop blaming everyone else.
How's that socialism workin' fer ya, Europe?
Spain has already spent $20 billion bailing out small regional savings banks that lent recklessly to property developers. //See this is what deregulation does in a NWO they all try to be like us using our toxic loans to live off of. It is like trying to fit everyone on board onto a dingy it just wont work the dingy will sink. There are homes everywhere GHOST towns they over built like we did. Banks lending money based on construction jobs during their housing boom. They bought our toxic loans and reinvested it into their economies . Short term growth that can not be sustained without real paying manufacturing jobs.
Gee wiz, no other nation has helped us out so we should not even lift 1 dime. Spain f##ked themselves and want others to dig them out. Of course Obama will give our a$$'s to them. But wait, we won't, we give billions to nations who are terrorist who plot and attack us.
We won the economic war now all they have left is to finish us off or sink they will be attacking at dawn no doubt. Any American that thinks a NWO will work with the EU must be a extreme Lefty. Any American that thinks Nafta will work should considering making Mexico the 57th state.
Red Dawn is right around the corner my friend.
I can't wait till Monday to short the market and friday when they announce the bail out and the market shoots back up. Implosion ! explosion !
Well, I just have to look at the bright side - when the economy tanks and there is NO more money available for anything anymore:
1. illegals will quit coming to our country just to be a burden on society and contribute nothing
2. drug dealers will quit dealing as there will be no profits
3. people will no longer be kidnapped and held for ransom - you can't get blood out of a turnip
4. no more prostitution - unless they want to create chicken ranches all over the country
5. all people will lose their materialistic nature as they will realize life was much better without the rat race
Guess a fallen economy is the only way to solve any of these problems in today's society.
6. There will be no more DEA, and we can grow our own and smoke it to our heart's content.
7. Sex will be traded for food and water, or companionship.
8. There will be no more shabby imported goods from China.
9. You can get free SUVs to use for bedrooms and/or chicken coops.
10. You won't have any utility bills.
Keep dreaming M the axis of evil wouldn't have it any other way.
In 2016 the interest on our national debt will be $680 billion per year. The USA austerity measures will begin. There will be a run on our banks. The national debt crisis is not a major issue in the USA. Homosexual marriages an legal marijuana are major issues. Wall Street has become a gambling credit default swap casino. Wash D.C. is run buy wall street. The bribery of our elected officials has been legalized and classified as campaign funds. Americans have rendered basic math politically incorrect and inconvenient to their lifestyle. We are a nation divided into democratic and republican herd intellects pointing fingers and ramming their agenders down each others throat. Here stands our union Mr. Webester, a nation of fools.
Free abortions are a bigger deal than legal marijuana.
Where do I sign up for a loan like Spains ??? 125 Billion..................No strings attached, after the loan is skimmed and grafted. I say they blown thru it in 6 mo.
They already blew through it, and they haven't even got it yet.
Why would the EU bail out countries to preserve the EU but then undermine the attempt by placing austerity on those countries thus making a recovery impossible impossible to achieve? You gotta love how skillful politicians are at NOT fixing problems. Dont forget that bailouts allow the corrupt big banks which created this mess to thrive at the expense of innocent people, after all it is well known that the purpose of bailouts is to save the big banks not innocent civilians. Why is it that all of a sudden those responsible for creating these problems are magically exempt from bearing responsibility?
As long as the unions keep running the country and the socalist/ marxest/ communist parties are in power how could you expect any other outcome? Why would we give them a dime untill they change and live within there means? Everybody cannot retire after 20 years of work and expect full pension, health insurance and yearly cost of living increases!
Think about it at some point there could be two retired people with full pension and a person still on the job all being paid for the same position at an inflated Union rate! Now times this by 2 million ( how ever many workers spain, greece, itally and the UK) actually have.
Socalism and forced unionization has never worked out for the middle class, poor or the wealthy! Just government officials
See how well austerity works you moron RepukliCONs! That is exactly what the RepukliCONs want to do and they have set it up and even admitted it outright. I guess its true, when it comes to RepukliCONs, you can't fix stupid.
Ourdoc,
I bet your solution would be to let them go broke, Oh wait they are. So are you suggesting that the responsiabe countries raise the taxes on there workers and companies to pay for the excess of the socalist union morons! Repuklicons? talk about stupid what post did you take this from or did you think it up by yourself. Really Stupid is spending 10 times more a year than you make and expect somebody else to pay for it !
Ourdoc, if you so detest austerity why not donate all of your assets to the cause comrad? Didn't think so. Such hypocrites LOL
well said, stupid. It's morons such as yourself that allow our government to behave as it does. You are pathetic
Shawn3179
As long as the unions keep running the country and the socalist/ marxest/ communist parties are in power how could you expect any other outcome? Why would we give them a dime untill they change and live within there means? Everybody cannot retire after 20 years of work and expect full pension, health insurance and yearly cost of living increases!
Think about it at some point there could be two retired people with full pension and a person still on the job all being paid for the same position at an inflated Union rate! Now times this by 2 million ( how ever many workers spain, greece, itally and the UK) actually have.
Socalism and forced unionization has never worked out for the middle class, poor or the wealthy! Just government officials
How long are you idiots going to believe this myth of a reality that does not exist? Im sorry but stupidity really angers me. Republicans have done an incredible job of brainwashing people with idiocy.
I only see stupidity for the left that buys into the socalist idealism! I guess that is the US were to have been socalist from day one we would not be so powerful or generally wealthy or what ever make the anti US feeling of the democratic soclaist party.
Have you ever spent any time (not on some resort beach) in any of the socalist countries. I have and there are still some wealthy but a whole nether difination of poor.
So i am guessing you are a liberal and that you really need to wake up! This success of this country was not made with socalist/marxest policies .(at least since the revolutionary war)