Spain to seek bailout assistance, Eurogroup reports

Spain has requested a European bailout in a bid to rescue its cash-starved banks, the New York Times is reporting:

European ministers offered Spain up to 100 billion euros, or $125 billion, on Saturday according to a euro zone official speaking on the condition of anonymity, but Spanish officials did not indicate how much they would accept.

At a news conference after European finance ministers met Saturday, Luis de Guindos, the Spanish economy minister, said in Madrid that the government had requested emergency financing for its banks.

Mr. de Guindos insisted that Spain should not be seen as the fourth euro economy requiring a bailout — after Greece, Ireland and Portugal — since the money would be used only to recapitalize banks.

The news came at the end of a 2-1/2 hour conference call featuring 17 finance ministers.

The AP is reporting that de Guindos emphasized the aid will go to the banking sector only. As such, he argued, the country should not come under new austerity measures.

The Eurogroup issued a statement Saturday in support of the efforts.

Related links:

• For continuing coverage follow our Econowatch blog here. 
• 2013 economic forecasts suggest we may look back fondly on doom and gloom