MADRID — Spain’s ailing banks will probably not need to tap all the $125.7 billion that’s been made available by the country’s euro partners, economy minister Luis de Guindos said Monday.
In a further indication that Spain’s economic problems are not as acute as some in the markets have been fearing, de Guindos also insisted that no additional austerity measures will be needed to meet the Spanish government’s deficit-reduction target. Spain is battling to avoid the same bailout fate as Greece, Ireland, Portugal, and Cyprus.
However, De Guindos said Spain’s most troubled bank, Bankia, will get urgent aid of $5.7 billion, while two indebted Spanish regions appealed for emergency funding to deal with a crippling liquidity crunch.
Spain’s banks have an estimated $232 billion in problematic real estate loans and investments following the collapse of the country’s property market in 2008. The other 16 eurozone countries have set aside the rescue package to help troubled Spanish lenders.