Finance ministers from the 17 countries that use the euro will discuss a potential rescue for Spain today, a eurozone official said, as pressure grows on Madrid to sort out its troubled banks even if it means seeking a European bailout.
The latest report, from the International Monetary Fund, estimated that Spain needs at least a €40bn capital injection following a stress test it performed on the country’s financial sector. That report came out early today, three days ahead of schedule, underscoring the urgency of the situation.
Spanish Deputy Prime Minister Soraya Saenz de Santamaria said yesterday that the government would wait for the results of three reports, including the IMF one and two from independent auditors, before acting. But pressure is rising on the country, and the government appears to have resigned itself to the fact that it needs a bailout with money pumped in from Europe to prop up its struggling banks, and cannot handle the job on its own.
A spokesman for Luxembourg Prime Minister Jean-Claude Juncker, who chairs the meetings of eurozone finance ministers, said that the ministers would discuss the situation on a conference call this afternoon.
Guy Schuller said Spain had not yet asked for help, “but we want to prepare if the call comes”.
Officials at Spain’s Economy Ministry did not immediately respond to requests for comment.
If it does request a bailout, Spain would become the fourth eurozone country to do so since the continent’s debt crisis hit two years ago. The three countries that have received rescues thus far – Greece, Ireland and Portugal – are fairly small, and many have worried that bailing out much-larger Spain could call the entire euro project into question.
Officials must walk a fine line between giving Spain enough money to make a rescue credible, if one is asked for, and not bankrupting the entire system.