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Spanish banks are not a danger for the stability of the euro and they will receive enough funds for recapitalisation, German Finance Minister Wolfgang Schaeuble said.
Spain's deep economic misery will get worse this year despite the country's request for a European financial lifeline of up to 100 billion euros (£80 billion) to save its banks, Spanish Prime Minister Mariano Rajoy said.
Spain will stay stuck in its second recession in three years, and more Spaniards will lose their jobs in a country where one in every four are already unemployed, Rajoy said a day after the country became the fourth and largest of the 17 countries that use the common currency to request a bailout.
The Group of Seven developed nations has welcomed the euro zone's plan to recapitalize Spanish banks, saying it marked an important step toward more fiscal integration in the region.
Christine Lagarde, managing director of the International Monetary Fund (IMF), says her organisation stands ready to support the implementation and monitoring of the financial assistance for Spain's banks.
The European Commission has welcomed Spain's request for aid for its banks, made to the euro zone's finance ministers on this evening, and said it was ready to proceed "swiftly" with necessary assessments and propose appropriate conditions on the sector.
European Commission President Jose Manuel Barroso and Economic and Monetary Affairs Commissioner Olli Rehn said in a statement:
The Eurozone has agreed to loan Spain up to 100 billion Euros for its banks, according to a Eurogroup statement.
Financial assistance to Spain would be provided by theEuropean Financial Stability Facility for the recapitalisation of its financial institutions.
The move is designed to halt a run on the country's banks.
Luke Baker covers eurozone news for the Reuters news agency:
Spain will make a request for aid from its euro zone partners, but not until it has a clearer idea of the amount of capital its banks needs from private-sector audits, three EU sources told Reuters today.
Spain indicated during a conference call of the euro zone's 17 finance ministers that it wanted aid for its banks but wouldn't specify the amount until Oliver Wyman and Roland Berger, two independent consultants, deliver their assessment of the capital needs some time before June 21.
"They want the aid, but they'll only say how much in a few days' time," one of the sources said.
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