Spain called for outside funds for the first time to battle its financial crisis as Budget Minister Cristobal Montoro said European â€œinstitutionsâ€ should help shore up the nationâ€™s lenders.
Spanish banks donâ€™t need â€œexcessiveâ€ amounts to recapitalize, and the question is â€œwhere that figure comes from,â€ Montoro said in an interview with Spanish broadcaster Onda Cero in Madrid today.
â€œThatâ€™s why itâ€™s so important that the European institutions open up and help us achieve, help facilitate, that figure because weâ€™re not talking about astronomical figures,â€ he said.
Prime Minister Mariano Rajoy has repeatedly called for the European Stability Mechanism, the euro regionâ€™s permanent rescue fund, to be able to sidestep governments and recapitalize lenders directly. At the same, he has ruled out the need for a bailout either for the nation or its banks.
Banco Santander SA (SAN) Chairman Emilio Botin said yesterday that about 40 billion euros ($50 billion) of European funds for four seized lenders including Bankia group would be enough to solve the industryâ€™s problems. Germany opposes empowering Europeâ€™s bailout fund to provide money directly to banks and the rules require it to be funneled through governments.
Montoro also said European leaders should approve a â€œbanking unionâ€ at their summit at the end of the month. He stuck to the governmentâ€™s view that the nation wonâ€™t need an overall bailout, saying itâ€™s â€œtechnicallyâ€ not possible to rescue Spain.