Eurozone finance ministers to discuss Spain bank bailout

Eurozone finance ministers are to hold a conference call to discuss a bailout for Spanish banks, according to the (BBC). EU sources told the BBC that Madrid could formally request financial assistance for its troubled banks this weekend. So far Spain has denied reports that an announcement on a European rescue plan for its banks is imminent. The International Monetary Fund (IMF) is estimating that Spain's banks need a cash injection of at least 40 billion euros. The IMF said on Friday that a "stress test" showed Spain's financial sector was well managed but "vulnerable". EU authorities earlier played down reports that Spain would ask for help as early as Saturday. But in an interview on Portuguese radio, European Central Bank Vice President Vitor Constancio said the call for assistance was expected soon. "It is expected that Spain will formulate a request for aid exclusively for banks recapitalization," he said. "There has to be an expression of will to have such a program for Spanish banks, and one may hope it happens rather swiftly." According to the BBC, Madrid says Spain is under pressure from Brussels to act, possibly before the feared uncertainty that could follow next weekend's Greek elections. Spanish Prime Minister Prime Minister Mariano Rajoy has insisted that any decision will come after the results of an independent audit on the Spanish banking system, which are due out within two weeks. The audit will produce a figure of how much money, in total, is needed to prop-up Spain's banks. A rescue deal would see money passed first to the Spanish government and then to the troubled banks. Meanwhile, (Reuters) news agency reported that Eurozone deputy finance ministers would first hold a conference call on Saturday morning to discuss a Spanish request for aid. The Eurogroup of finance ministers would then discuss the issue on another conference call, the news agency said, citing unnamed EU and German officials. A downgrade of Spain's creditworthiness by rating agency Fitch earlier this week has been seen by some as adding to the urgency of shoring up Spain's finances. Greeks will go to the polls on 17 June to try and end a political impasse that Eurozone leaders say is harming Greece's ability to tackle its economic crisis. (QNA)