FXstreet.com (San Francisco) - Luis De Guindos, Spanish finance
ministry, has confirmed that Spain is asking for €100 billion to
try to solve and recapitalize its banking system. De Guindos has
announced the decision and has pointed that the conditions are in
better terms than market but haven't explained that terms.
"The Eurogroup has been informed that the Spanish authorities will
present a formal request shortly and is willing to respond
favourably to such a request," stated the Eurogruop official note.
"The loan amount must cover estimated capital requirements with an
additional safety margin, estimated as summing up to EUR 100
billion in total," continues the EU paper. The €100 billion will be
managed by the FROB and the new "debt will count as a public Debt,"
De Guindos pointed.
De Guindos also said that the "financial aid will be focused in the
30% of the banking system; the other 70%, as the IMF report said,
are in good conditions to afford stress conditions."
According to De Guindos, the Eurogroup haven't asked more austerity
measures but Mauricio Carrillo, FXstreet.com analyst, questioned it
in his twitter account (@MCarrilloFX), "How do you expect to pay it
if Spain GDP will contract in 2012 and 2013 ?" In addition,
Carrillo comments that "current conditions are 6% interest," so
better terms is any number below 6%.
Meanwhile De Guindos was in the conference, Wolfgang Schäuble from
the Eurogroup said that "EFSF is ready to provide €100 billions to
Spain" but "the Iberian country will have to pay back bank aid."
The Eurogroup also ask in his statement that they will monitorize
deficit targets and austerity program. "The Eurogroup is confident
that Spain will honour its commitments under the excessive deficit
procedure and with regard to structural reforms, with a view to
correcting macroeconomic imbalances in the framework of the
European semester. Progress in these areas will be closely and
regularly reviewed also in parallel with the financial assistance."
Linda Yueh, Economic editor at Bloomberg, wrote in his twitter
(@lindayueh) that "Spain's aid of as much as €100bn adds to €386bn
in pledges to Greece, Ireland and Portugal that European
governments and IMF have made since 2010."
To finish, "Spain is Greece after all," @zerohedge concluded in a
laconic tweet after closing the press conference.