June 25 - Spain formally requests European aid for its indebted banks, but the lack of details rekindled investor doubts over the financial sector. Ciara Sutton reports.
It's finally official - Spain has formally requested a bailout package for its ailing banks. It's asked for 100 billion euros from it's euro zone partners - enough, says the Economy Ministry, to cover all the banks needs plus a little extra. An EU Commission spokesman said the request would help Spain balance it's books. (SOUNDBITE) (English) SPOKESPERSON FOR EU COMMISSIONER FOR ECONOMIC AND MONETARY AFFAIRS OLLI REHN, AMADEU ALTAFAJ, SAYING: "Restructuring the banking sector is key to reinforce the confidence in the Spanish economy and to restore the conditions to proper access to credit by companies and households, for sustaining the recovery." Many in Spain believe the banks are to blame for the current economic crisis - lending too much money during a property boom. Last week an independent audit revealed the country's banks need between 51 billion and 62 billion euros in extra capital to survive. (SOUNDBITE) (Spanish) MADRID RESIDENT MARINA, SAYING: "If the bailout money lands in people's hands, then it is fine. If the money is for those who lent it to us plus the interest, it will be worthless." Spanish bond yields - already at euro era highs - started to rise again after the announcement. And some analysts say the request has come too late. (SOUNDBITE) (English) SENIOR STRATEGIST AT CMC MARKETS, BRENDA KELLY SAYING: "It's been about four years behind Ireland and Ireland is still suffering from the actual house prices falling. We saw the CSO numbers coming out today that they have fallen 15 percent year on year from last May. So Spain's house prices are probably set to fall that bit further as well. And this 100 billion may just be a flash in the pan." The EU hasn't yet said how much it will lend Spain but some analysts now fear a sovereign bailout is the inevitable next step. Ciara Sutton, Reuters