Spain’s cap officially in hand for its banks

The Spanish government has formally asked the eurozone for cash to prop up its failing banks.

The economy minister Luis de Guindos has sent a letter to the president of the eurogroup of finance ministers requesting help to recapitalise the sector.

Some estimates say Spain’s banks need more than 60-billion euros of new cash to stay afloat – eurogroup ministers have already said that up to 100-billion would be made available.

Spain’s Prime Minister said he will target economic growth and unemployment.

“The common currency must be irreversible. And in the next European council we must find the way to gradually move to integration. That is why we need to set a pre-established calendar with concrete phases and qualification criteria to get over those phases. The political message must be strong and the integration calendar must be clear to re-establish confidence in the euro’s stability,” Mariano Rajoy said.

Spain’s banks are sinking in a sea of debt after lending huge sums that fuelled the country’s property bubble which then burst spectacularly.

European Commission and European Central Bank inspectors are expected to visit Spain to make their own assessment of how much the banks need.

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