The rescue of ailing Spanish banks may cost far less than the 100 billion euros ($125 billion) to be granted by eurozone partners. Madrid estimates that in the end some 60 percent of the sum will suffice.
The Spanish government is confident that it will not have to use to the full a 100-billion-euro ($125-billion) loan that euro area partners are theoretically willing to grant to banks still suffering from a 2008 real estate crisis.
Economy Minister Luis de Guindos told Monday's edition of the International Herald Tribune that his country was likely to need only about 60 percent of the promised credit line to get ailing domestic banks on their feet again. This corroborated European estimates prior to the approval of the loans, with leaders at the time saying they wanted to send a positive message to the markets with a potential sum thought to be larger than the required amount.
The minister's assessment was based on two studies ordered by the government to estimate the needs of the banking sector. He said Madrid was still waiting for the results of two independent audits. "But I don't think they're going to be very different," de Guindos said.
ECB to the rescue?
But the banks' troubles aren't the government's only concern. The country is grappling with an economy stuck in recession. Spain on Monday officially downgraded its already feeble economic performance in 2011, saying that growth last year amounted to just 0.4 percent instead of the 0.7 percent stated previously.
Analysts believe Spain will eventually seek a sovereign bailout as borrowing rates on financial markets remain stubbornly high and above levels that the country could afford in the long term.
Economy Minister Luis de Guindos said he was confident the European Central Bank (ECB) would intervene by resuming its bond-buying program. "The Spanish government would accept, though, that ECB intervention in secondary markets should not relax our fiscal consolidation effort," de Guindos added.
hg/msh (AFP, Reuters)