Spain Seeks Aid For Banks

Spain called for outside funds for the first time to battle its financial crisis as Budget Minister Cristobal Montoro said European “institutions” should help shore up the nation’s lenders.

Spanish banks don’t need “excessive” amounts to recapitalize, and the question is “where that figure comes from,” Montoro said in an interview with Spanish broadcaster Onda Cero in Madrid today.

“That’s why it’s so important that the European institutions open up and help us achieve, help facilitate, that figure because we’re not talking about astronomical figures,” he said.

Prime Minister Mariano Rajoy has repeatedly called for the European Stability Mechanism, the euro region’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 industry’s problems. Germany opposes empowering Europe’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 “banking union” at their summit at the end of the month. He stuck to the government’s view that the nation won’t need an overall bailout, saying it’s “technically” not possible to rescue Spain.

Bloomberg

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