News / Europe

    Spanish Bank Bailout Heightens Pressure on Madrid

    Spain's Prime Minister Mariano Rajoy speaks during a news conference at his Popular Party headquarters in Madrid, May 28, 2012. Spain's Prime Minister Mariano Rajoy speaks during a news conference at his Popular Party headquarters in Madrid, May 28, 2012.
    x
    Spain's Prime Minister Mariano Rajoy speaks during a news conference at his Popular Party headquarters in Madrid, May 28, 2012.
    Spain's Prime Minister Mariano Rajoy speaks during a news conference at his Popular Party headquarters in Madrid, May 28, 2012.
    VOA News
    Economic pressures are growing on Spain after the government took over the country's third largest bank with a $24-billion bailout to account for its toxic real estate loans.

    Prime Minister Mariano Rajoy said Monday that the debt-ridden government's takeover of Bankia would not force the Spanish government to seek a bailout from its European neighbors. With more than $40 billion in bad loans, Bankia was one of the hardest hit Spanish financial institutions during the country's real estate collapse, although some analysts say another $37 billion in government assistance may be needed to prop up other banks.

    It was uncertain how the bailout would be paid for. A senior economist with the British bank Standard Chartered, Sarah Hewin, said the euro currency bloc's rescue fund could provide the funds.

    "The European bailout funds are there to help with the banks, particularly once we have the European Stability Mechanism up and running in July," said Hewin. "That has the ability then to support banks rather than having to support the governments as a whole."

    Some Spaniards, including Javier Casas, a justice sector administrator, voiced their anger at the thought they should be responsible for the banks' financial missteps.

    "I don't think it's right that we have to pay for debts of a private entity whose directors and mangers generated the debt," said Casas.

    With the growing Spanish banking crisis, investors showed new concern about debt sold by the Madrid government.

    Interest rates on Spanish bonds rose to more than five percent higher than those sold by economic powerhouse Germany. It was the biggest interest rate spread between the two countries in the 13-year history of the euro currency.

    Meanwhile, financial market concerns eased Monday in Greece, as political surveys released over the weekend showed new support for the conservative New Democracy party. It supports adherence to the austerity plan Athens agreed to earlier this year in exchange for its second international bailout in two years.

    After a splintered election earlier this month, Greece's fractious political parties were unable to forge a new coalition government and a new election is set for mid-June.

    Voter sentiment seemed to be trending toward the radical left Syriza party that has called for rejection of the severe spending cuts. If the conservatives win enough seats in the parliamentary voting, they may be able to form a new government with the socialists, who also favor the bailout terms.

    Some information for this report was provided by AP and AFP.

    You May Like

    Clinton, Trump and the 'Woman’s Card'

    Ask supporters of Democratic front-runner in US presidential campaign, and they’ll tell you Republican presidential candidate is playing a dangerous hand

    Russian Censorship Group Seeks Chinese Help to Better Control Internet

    At recent Safe Internet League forum in Moscow, speakers from both nations underscored desire for authorities to further limit and control information online

    Video Makeshift Pakistani School Helps Slum Kids

    Free classes in Islamabad park serve a few of the country’s nearly 25 million out-of-school youths; NGO cites ‘education crisis’

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Turkish Kurd Islamist Rally Stokes Tensionsi
    X
    April 29, 2016 12:28 AM
    In a sign of the rising power of Islamists in Turkey, more than 100,000 people recently gathered in Diyarbakir, the main city in Turkey’s predominantly Kurdish southeast, to mark the birthday of the Prophet Muhammad. The gathering highlighted tensions with the pro-secular Kurdish nationalist movement. Dorian Jones reports from Diyarbakir.
    Video

    Video Turkish Kurd Islamist Rally Stokes Tensions

    In a sign of the rising power of Islamists in Turkey, more than 100,000 people recently gathered in Diyarbakir, the main city in Turkey’s predominantly Kurdish southeast, to mark the birthday of the Prophet Muhammad. The gathering highlighted tensions with the pro-secular Kurdish nationalist movement. Dorian Jones reports from Diyarbakir.
    Video

    Video Pakistani School Helps Slum Kids

    Master Mohammad Ayub runs a makeshift school in a public park in Islamabad. Thousands of poor children have benefited from his services over the years, but, as VOA's Ayesha Tanzeem reports, roughly 25 million school-age youths don't get an education in Pakistan.
    Video

    Video Florida’s Weeki Wachee ‘Mermaids’ Make a Splash

    Since 1947, ‘mermaids’ have fascinated tourists at central Florida’s Weeki Wachee Springs State Park with their fluid movements and synchronized ballet. Performing underwater has its challenges, including cold temperatures and a steady current, as VOA’s Lin Yang and Joseph Mok report.
    Video

    Video Somali, African Union Forces Face Resurgent Al-Shabab

    The Islamic State terror group claimed its first attack in Somalia earlier this week, though the claim has not been verified by forces on the ground. Meanwhile, al-Shabab militants have stepped up their attacks as Somalia prepares for elections later this year. Henry Ridgwell reports there are growing frustrations among Somalia’s Western backers over the country’s slow progress in forming its own armed forces to establish security after 25 years of chaos.
    Video

    Video Bangladesh Targeted Killings Spark Wave of Fear

    People in Bangladesh’s capital are expressing deep concern over the brutal attacks that have killed secular blogger, and most recently a gay rights activist and an employee of the U.S. embassy. Xulhaz Mannan, an embassy protocol officer and the editor of the country’s only gay and transgender magazine Roopban; and his friend Mehboob Rabbi Tanoy, a gay rights activist, were hacked to death by five attackers in Mannan’s Dhaka home earlier this month.
    Video

    Video Documentary Tells Tale of Chernobyl Returnees

    Ukraine this week is marking the 30th anniversary of the world's worst nuclear accident, at the Chernobyl nuclear power plant. Soviet officials at first said little about the accident, but later evacuated a 2,600-square-kilometer "exclusion zone." Some people, though, came back. American directors Holly Morris and Anne Bogart created a documentary about this faithful and brave community. VOA's Tetiana Kharchenko reports from New York on "The Babushkas of Chernobyl." Carol Pearson narrates.
    Video

    Video Nigerians Feel Bite of Buhari Economic Policy

    Despite the global drop in the price of oil, Nigerian President Muhammadu Buhari has refused to allow the country's currency to devalue, leading to a shortage of foreign exchange. Chris Stein reports from Lagos businessmen and consumers are feeling the impact as the country deals with a severe fuel shortage.
    Video

    Video  Return to the Wild

    There’s a growing trend in the United States to let old or underused golf courses revert back to nature. But as Erika Celeste reports from one parcel in Grafton, Ohio, converting 39 hectares of land back to green space is a lot more complicated than just not mowing the fairway.
    Video

    Video West Urges Unity in Libya as Migrant Numbers Soar

    The Italian government says a NATO-led mission aimed at stemming the flow of migrants from Libya to Europe could be up and running by July. There are concerns that the number of migrants could soar as the route through Greece and the Balkans remains blocked. Western powers say the political chaos in Libya is being exploited by people smugglers — and they are pressuring rival groups to come together under the new unity government. VOA's Henry Ridgwell reports.
    Video

    Video Russia’s TV Rain Swims Against Tide in Sea of Kremlin Propaganda

    Russia’s media freedoms have been gradually eroded under President Vladimir Putin as his government has increased state ownership, influence, and restrictions on critical reporting. Television, where most Russians get their news, has been the main target and is now almost completely state controlled. But in the Russian capital, TV Rain stands out as an island in a sea of Kremlin propaganda.

    Special Report

    Adrift The Invisible African Diaspora