Arab Today, arab today spain to unveil cost of banking rescue
Last Updated : GMT 20:57:50
Arab Today, arab today
Arab Today, arab today

Spain to unveil cost of banking rescue

Arab Today, arab today

Arab Today, arab today Spain to unveil cost of banking rescue

Madrid - AFP

Spain unveils on Friday the full cost of rescuing its stricken banks, seen by investors as one of the final steps before a looming sovereign bailout. An independent audit, to be released after markets close, will serve as the basis for the release of up to 100 billion euros ($129 billion) from a eurozone rescue loan agreed in June. It comes a day after Spain announced a tight-fisted budget for 2013, which squeezes out 39 billion euros in austerity measures, sparing only retirement pensions, to rein in the public deficit. Broad, savage cuts including in education and health have sparked fierce protests, leading to clashes outside parliament this week between police and anti-austerity demonstrators. Analysts say Prime Minister Mariano Rajoy is hoping the budget and banking audit will satisfy the conditions of any sovereign bailout, saving it the political humiliation of bowing to outside demands."The suspicion is that Rajoy is hoping these new measures will be enough to prevent the imposition of even tougher terms when Spain applies for its bailout," said a report by London-based foreign exchange firm Moneycorp. "Whatever his citizens might have thought, investors were impressed by the prime minister's policy. They saw it as a step closer to the bailout which, they still believe, will solve the problems of Spain and the eurozone." The banking audit, led by US financial consultants Oliver Wyman, examines each of Spain's 14 major banking groups making up 90 percent of the struggling financial system. A huge swathe of the system is bogged down with bad loans from a 2008 property market collapse. Only a few, such as Santander, the eurozone's biggest in terms of market value, have solid balance sheets. The audit will also help to determine the price of toxic assets held by the banks, government sources said. A first group of banks, which have already been nationalised and whose capital requirements are expected to be confirmed by the audit, are to receive rescue money from November. Among them is state-rescued lender Bankia, the country's fourth biggest bank, whose request for more than 23 billion euros in capital forced Madrid into the arms of its eurozone partners. Whatever the price tag placed on the rescue, Rajoy's right-leaning Popular Party government has stressed that not all the cash need come from the rescue loan; some may be able to find private financing. But signs are mounting that Madrid, despite all its manoeuvring, may end up picking up the tab for the financial sector rescue, boosting its overall debt level and heightening the urgency of a sovereign bailout.  The rescue loan is to be funnelled through Spains's state-backed Fund for Orderly Bank Restructuring (FROB). But Spain's government had hoped that a new European Stability Mechanism would eventually be empowered by Brussels to inject the loan directly, keeping the debt off Madrid's books. A June summit of European leaders had in fact agreed to set up a European banking union with a single supervisor by the year's end, allowing the ESM to take such action. On Tuesday, however, Germany, the Netherlands and Finland laid down a series of new conditions, and said the ESM should only act on new problem loans, not "legacy assets" such as those being dealt with in Spain. If Spain does formally request a broader sovereign bailout, it would become eligible to benefit from a bond-buying programme for troubled states that was outlined by the European Central Bank on September 6. Such a programme would curb Spain's borrowing costs but to qualify Madrid would have to formally apply for help from the ESM and submit to its conditions.As Spain's borrowing costs remain high, with the yield on 10-year bonds only just below six percent on Friday morning, the odds on a sovereign bailout seemed to be shortening daily. Political tensions are rising between Madrid and the northeastern Spanish region of Catalonia, an economically powerful state that has called snap elections on November 25 in a drive for more independence. The debt-struck region's parliament Thursday voted for referendum on Catalonia's "collective future". Spain's central government has vowed to thwart any attempt to hold a poll on Catalan independence. Investors fear these tensions could make it harder for Madrid to rein in deficits in the regions, which account for half of Spanish expenditure with responsibilities for health and education. The regions' debt situation is perilous, forcing many to apply for help from an 18-billion-euro central government liquidity fund. Castilla-La Mancha asked for 848 million euros on Thursday, adding to earlier requests from Catalonia, Valencia, Andalusia and Murcia that already amount to a total of about 15 billion euros.

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today spain to unveil cost of banking rescue Arab Today, arab today spain to unveil cost of banking rescue

 



Arab Today, arab today
Arab Today, arab today Tourism shows signs of recovery

GMT 09:59 2017 Monday ,20 February

Tourism shows signs of recovery
Arab Today, arab today Sarah Belamesh designs antiques of "ceramic"

GMT 19:45 2017 Monday ,20 February

Sarah Belamesh designs antiques of "ceramic"
Arab Today, arab today Top Yemen commander killed

GMT 09:55 2017 Wednesday ,22 February

Top Yemen commander killed
Arab Today, arab today Media host Mona Iraqi stresses her show's success

GMT 15:32 2017 Wednesday ,22 February

Media host Mona Iraqi stresses her show's success

GMT 20:59 2017 Tuesday ,21 February

Economy good, but homes in German cities overpriced

GMT 05:29 2017 Tuesday ,21 February

Sovereign funds pulled $38bn from markets in 2016

GMT 05:15 2017 Tuesday ,21 February

Gold firms as markets await Trump tax plans

GMT 04:58 2017 Tuesday ,21 February

EU, IMF in ‘common position’ on Greece crisis

GMT 14:57 2017 Monday ,20 February

A giant initial public offering on track

GMT 14:50 2017 Monday ,20 February

Energy Market Research
View News in Arabic - Business: نفط وبتروكيماويات
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today To hold social dialogue over secondary school

GMT 07:43 2017 Wednesday ,22 February

To hold social dialogue over secondary school
Arab Today, arab today 63-Year-Old Woman Delivers Baby

GMT 12:35 2017 Tuesday ,21 February

63-Year-Old Woman Delivers Baby
Arab Today, arab today Milan laughs while Rome cries

GMT 10:28 2017 Wednesday ,22 February

Milan laughs while Rome cries
Arab Today, arab today Pluto's unruly moons

GMT 06:31 2015 Thursday ,04 June

Pluto's unruly moons
Arab Today, arab today Nissan enhances sales in most markets

GMT 14:08 2017 Monday ,20 February

Nissan enhances sales in most markets
Arab Today, arab today Competes Sweden and Germans by S90

GMT 22:36 2017 Thursday ,16 February

Competes Sweden and Germans by S90
Arab Today, arab today Janat pleased for issuing 'Good Morning'

GMT 06:41 2017 Monday ,20 February

Janat pleased for issuing 'Good Morning'
Arab Today, arab today Small ponds have outsized impact

GMT 15:53 2017 Tuesday ,21 February

Small ponds have outsized impact

GMT 06:34 2017 Sunday ,19 February

Ahmed Fahmy stresses he did not ignore singing

GMT 06:50 2017 Wednesday ,15 February

Tragic fluctuations of Bakhtiari's life revealed

GMT 14:29 2017 Monday ,20 February

Prepares to present her new collection

GMT 14:06 2017 Friday ,17 February

London to tax old cars

GMT 23:29 2017 Thursday ,16 February

Home built on sand castles-style costs $8m

GMT 05:15 2017 Tuesday ,21 February

Omega 3 can reduce asthma cases

GMT 19:16 2017 Friday ,17 February

Aziz House ready to host the tourists

GMT 13:12 2015 Saturday ,09 May

Sheikh Sultan opens Sharjah Centre

GMT 12:39 2017 Monday ,20 February

newest smartphone another winner for Huawei

GMT 19:10 2017 Friday ,17 February

Hats, scarves add beauty to women
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday