Rajoy Seeks Formula for Spanish Banks in Talks With EU Leaders
Spanish Prime Minister Mariano Rajoy said he’s talking to other European leaders about how to shore up the country’s banks as a lawmaker said the industry may need a $126 billion international bailout.
Rajoy said he wouldn’t give estimates on how much capital the nation’s lenders need until he has reports from two international consultants, due this month, and from the International Monetary Fund, due on June 11.
“After that I will give my figure and the government will say what the system needs to be recapitalized,” he told a news conference with Dutch Prime Minister Mark Rutte in Madrid today. “I’ve been talking to my European Union colleagues, and to Prime Minister Rutte, to take a decision on this matter.”
European stocks rose today after China cut interest rates and amid speculation that leaders of the 17-member euro region are preparing a rescue operation tailored to Spain, which has been struggling to shore up its banking system. Rajoy is pushing against German opposition to changing the rules of Europe’s rescue mechanisms to allow them to recapitalize banks directly.
Spanish banks may need as much as 100 billion euros ($126 billion) in aid which could be funneled through the nation’s bank-bailout fund, Antonio Lopez Isturiz, the general secretary of the European People’s Party, said today in an interview with TVE in Madrid. Spanish Economy Minister Luis de Guindos said yesterday that the stress-test reports from Roland Berger and Oliver Wyman will be ready in the next 10 to 15 days.
Spain’s 10-year bond yield fell to 6.088 percent today from 6.282 percent yesterday -- retreating from the 7 percent threshold that triggered bailouts in Greece, Ireland and Portugal -- after the Treasury met its issuance goal at a bond auction. Investors bought 2.07 billion euros of Spanish securities, surpassing the maximum target of 2 billion euros.
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