Spain expected to request bank bailout Thursday: diplomat

AFP , Wednesday 20 Jun 2012

Spain is expected officially to transmit a detailed request for a banking rescue on Thursday to its eurozone partners, an EU diplomat claims

Spanish authorities "are expected to ask the Eurogroup tomorrow for help through the EFSF (European Financial Stability Facility)," said an EU diplomat on Wednesday, referring to a meeting in Luxembourg of finance ministers from the 17 nations sharing the currency.

"The details are expected to be negotiated tomorrow," said the diplomat, who asked not to be identified.

The size of the request will depend on two independent audits on Spain's troubled banks that are expected to be finalised on Thursday, one from German firm Roland Berger, the other from US firm Oliver Wyman.

Madrid is awaiting the audits to put a figure on a request following an offer from its eurozone partners June 9 to loan it up to 100 billion euros ($125 billion) to shore up its banks, saddled with bad loans extended during a real estate bubble that imploded in 2008.

"The absence of details (on the size and timing of the aid) has been prejudicial," said the source.

Spain's borrowing costs this week shattered the 7.0-percent barrier for the first time since the creation of the euro in 1999 as markets worried over the fate of the eurozone's fourth economy.

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