Eurozone Fin Mins Set To Approve Spanish Bank Bailout Today After Massive Protests In Madrid

spain protest july 2012Police riots run after demonstrators protest against austerity measures announced by the Spanish government in Madrid, Spain, Thursday July 19, 2012. Concerns over Spain’s attempts to restore market confidence in its economy resurfaced Thursday after a bond auction went poorly and its borrowing costs edged higher – even as the country’s Parliament passed the latest round of harsh austerity measures designed to cut its bloated deficit.

Photo: AP/Andres Kudacki

MADRID (AP) — Finance ministers from the 17 euro countries are expected to approve conditions for a bailout loan for Spanish banks on Friday, hours after the country was hit by massive anti-austerity protests in some 80 cities.The document the ministers will consider in their teleconference calls for strict monitoring of Spain’s banks that receive aid. It also requires the Spanish government to present by the end of this month plans to reduce its budget deficit to under 3 per cent of the country’s gross domestic product by 2014.

The full amount of money needed to shore up Spain’s banks is unlikely to be known until September, after individual banks have been examined. The finance ministers have agreed to lend up to €100 billion ($122.9 billion), and the agreement to be considered Friday calls for an initial disbursement of €30 billion ($36.9 billion) this month.

Spanish banks are saddled with huge losses from soured real estate investments. The government cannot afford to rescue them itself, raising fears it may need rescue loans itself.

Government has passed painful austerity measures — tax hikes and cuts to benefits, salaries and pensions — to reduce state debt and strengthen confidences in its finances.

Spaniards have been hit hard, with unemployment around 25 per cent, and staged massive protests across the country on Thursday night.

Police say 15 people were arrested and 39 people injured overnight in central Madrid after tens of thousands of people took part in a demonstration to protest the conservative government’s latest austerity package.

Police fired rubber bullets to disperse groups of protesters in streets in and around the Spanish Parliament building. The protesters set fire to garbage containers and threw cans and other objects at the police

A spokeswoman said Friday 10 police were among the injured. She spoke on condition of anonymity in keeping with police regulations.

The demonstration Thursday evening in Madrid was one of 80 held in cities across Spain to protest the austerity measures the government says are necessary if Spain wants to avoid a bailout like Greece, Ireland and Portugal.


Melvin reported from Brussels.

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