Spain seeks first banking rescue payment 'shortly'

Spain's government said Friday it will soon request a first payment for its deeply troubled banks from an emergency eurozone rescue line. "The request will be sent shortly," a spokeswoman for the Economy Ministry told AFP. "It is being worked on," she said, declining however to specify the timing or exact amount of the request. The money was being sought for crisis-torn Spanish banks that have already been nationalised, she said: Bankia, Catalunya Caixa, NovaGalicia Banco and Banco de Valencia. "The Bank of Spain has to ask that the funds be made available to it and that is the request that will be sent," the spokeswoman said, adding that the size would depend on a central bank analysis. "The Bank of Spain is doing its analysis and that report is for the nationalised banks, so depending on that analysis they will see what request they need to make," she said. Spain's eurozone partners agreed in June to lend up to 100 billion euros ($124 billion) to salvage the nation's banks, buckling under record bad loans built up since a 2008 property crash. The eurozone's bailout fund, the European Financial Stability Facility, has already put aside an emergency reserve of 30 billion euros in case of urgent requests by Spain, a spokeswoman for the fund said. Under a written agreement drawn up last month, the Bank of Spain can ask for a specific sum from that emergency reserve. But any payment first needs the approval of the European Commission and officials of the 17-nation eurozone working in liaison with the European Central Bank. The bulk of the rescue loan is expected to be disbursed from November onwards to help finance a restructuring and recapitalisation of the Spanish banking sector.