A bailout in all but name

It’s not being called a bailout but it’s difficult to see what else to call it when Spain is getting around €100 billion in favourable term loans from the Eurozone to support the country’s banks. Economy minister Luis de Guindos says that the aid is for the financial system rather than the economy, and denied that it was a “rescue”, but Spain’s banks will now be audited to determine the exact amount of money needed.

This is not a bailout in the sense of Greece because there are no austerity measures attached, at least not beyond those already announced by Madrid. Nonetheless, the Eurozone money will go to the Government’s Fund for Orderly Bank Restructuring and it will be a debt that Spain as a country owes the EU. It’s difficult, as I say, to see what else to call it other than a bailout.

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