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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  1. Richard Edgar

Spain 'poised to ask for financial help'

It certainly looks as if Spain will look for financial help. It's remarkable they haven't asked already given that it's widely acknowledged that Spanish banks are in a precarious position. And, everyone apart from the Spanish government thinks that it doesn't have enough money to prop them up.

Headquarters of Spanish bank Bankia in Madrid Credit: Reuters

Tomorrow we understand there will be a telephone conference involving officials and finance ministers from across the Eurozone. Spain will ask for help we think then they'll discuss how to get the cash to its banks.

Crucially they will discuss what conditions to attach. In every other bailout, in Greece, in Ireland and Portugal the international authorities have given orders to impose austerity.

That has led to hardship and humiliation and that's meant the voters have eventually kicked out the government.

But the Spanish government wants to avoid that fate. And so it's already pointing out its imposing authority. It will want to get the money, but keep its pride.

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