Spain,
on Monday, has officially requested for a bailout but hasn't given any details
including the actual amount of money requested.
The
EU leaders will meet on Thursday to discuss the growing debt crisis. The
details of Spanish bailout are expected to be announced after the meeting. The
focus of the conference will be on Italy and Spain, considered by many as “too
big to fail” but are now being tagged as “too big to bailout”.
Spain’s
Economy Minister Luis de Guindos, has said that his country would request an
amount that would enable its bank to pull themselves out from the crisis plus
some additional funds. European leaders have already offered $125 billion for
Spain’s crippling banking sector.
Who will get the money?
The
bailout will go directly to the bank recapitalization fund and from there will
be distributed among the banks.
-----------------------------------------------------
-----------------------------------------------------
The
European leaders can also decide to give aid to the country’s banks directly,
instead of going through the Spanish government. But Germany thinks otherwise.
Several Spanish banks are being criticized for mismanagement of aid and
corruption. If the bailout money goes through the Spanish government then it
will be answerable to other European leaders for misuse of funds.
Full
details of the bailout package will be released before July 9th,
when De Guindos is expected to sign the agreement after meeting with European
finance ministers.
Your comments and feedback are always appreciated
