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Osborne criticises Spain bailout

George Osborne has said the failure of the Spanish bank bailout is "depressing" as the banks had to be directly recapitalised into to convince the markets of its credibility. Spain's borrowing costs have hit the highest level for 13 years.

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Germany forced to defend Spanish bailout

German Chancellor Angela Merkel was forced to defend the European rescue plan for Spain's indebted banks, as many German citizens are convinced their generosity is being abused.

Opinion polls show the German public are growing tired of their country's role as paymaster in the euro zone debt crisis.

Merkel's spokesman Steffan Seibert defended the bailout saying:

The Spanish application comes from the state, the money will go to the state, the state is liable and the state takes on the responsibility for the stipulated conditions.

It sends a good signal to the markets and Europe's partners that Europe is capable of acting and now has the instruments at its disposal to deal with crisis events that it did not have two or three years ago."

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