The 17 nation EU bloc has agreed to lend Spain up to $125bn for its banks rescue finds. The actual amount has not been finalized yet as Spain does an internal assessment of its capital requirements, which will be completed within two weeks.
The impact of the current injection will be clear within six to nine months. The rescue comes after Greece, Ireland and Portugal’s bailout.
Spain insists that the money is “neither a rescue nor a bailout”. In fact, according to Spanish journalist Miguel-Anxo Murado, many in Spain are surprised that it is receiving any bailout at all. "Now the controversy is actually whether we should be happy or humiliated about this" He said.
The implementation of the rescue package will be overseen by
- The International Monetary Fund
- The European Central Bank
- Eurozone finance ministers.
The terms of the deals have not been finalized, therefore they are fuelling speculation in the already tumultuous financial markets. This is probably one of the reasons why this positive news failed to have any impact over the investor confidence.
The Spanish government said in a statement.
- It will continue to implement the economic reforms
- It will continue to borrow money commercially
- It will continue with the bond auctions scheduled for 19th and 21st June.
Your comments and feedback are always appreciated
Sarfaraz. A. K.