Spain on the verge of ESM bailout

The Eurogroup meeting of the 17 eurozone member’s finance ministers is taking place with a backdrop of crisis and a key upcoming summit.

Top of the agenda is Spain, where a financial rescue is imminent.

“Theoretically the European Safety Mechanism will become active in the next few days. In some ways it is the ideal solution, from the point of view of the capital injections into the banks, which is what Spain is now trying,” said Spanish Finance Minister Luis de Guindos.

The auditors going over Spain’s banking books, Roland Berger and Olivier Wyman, today estimated Spanish banking’s immediate capital needs at between 51 and 62 billion euros.

Greece remains a preoccupation, too. The new government is determined to renegotiate its bailout deal, extending by two years its 2014 deadline to have a budget deficit of only 2.1% from last year’s 9.3%.

And if Europe will not ride to the rescue then Cyprus is exploring another option, confirming today it has applied to Russia for a two to three billion-euro loan.

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