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

Hong Kong Democracy Calls Spread to Macau

Macau and Hong Kong are China’s two 'special administrative regions' which gives them a measure of autonomy More

After Nearly 2 Years, Pistorius Remains Elusive

Reporter Anita Powell reflects on her experience covering the Olympic athlete's murder trial More

Kenyan Coastal Town Struggles With Deadly June Attacks

Three months after al-Shabab militants allegedly attacked their town, some Mpeketoni residents are still bitter, question who was really behind the assaults More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Obama to Ramp Up Anti-Ebola Efforts in Africai
X
Luis Ramirez
September 15, 2014 11:01 PM
President Barack Obama on Tuesday will unveil his plan to ramp up efforts against the spread of the Ebola virus in Africa. VOA White House Correspondent Luis Ramirez reports.
Video

Video Obama to Ramp Up Anti-Ebola Efforts in Africa

President Barack Obama on Tuesday will unveil his plan to ramp up efforts against the spread of the Ebola virus in Africa. VOA White House Correspondent Luis Ramirez reports.
Video

Video West Trades Accusations Over Ransoms

As world leaders try to forge a common response to the threat posed by Islamic State militants in Iraq and Syria, there is simmering tension over differing policies on paying ransoms. In the past month, the jihadist group has beheaded two Americans and one Briton. Both countries refuse to pay ransom money. As Henry Ridgwell reports for VOA from London, there is uncertainty in the approach of some other European nations.
Video

Video Scotland Independence Bid Stokes Global Interest

The people of Scotland are preparing to vote on whether to become independent and break away from the rest of Britain, in a referendum being watched carefully in many other countries. Some see it as a risky experiment; while others hope a successful vote for independence might energize their own separatist demands. Foreign immigrants to Scotland have a front row seat for the vote. VOA’s Henry Ridgwell spoke to some of them in Edinburgh.
Video

Video Washington DC Mural Artists Help Beautify City

Like many cities, Washington has a graffiti problem. Buildings and homes, especially in low-income neighborhoods, are often targets of illegal artwork. But as we hear from VOA’s Julie Taboh, officials in the nation's capital have come up with an innovative program that uses the talents of local artists to beautify the city.
Video

Video US Muslim Leaders Condemn Islamic State

Leaders of America's Muslim community are condemning the violent extremism of the Islamic State group in Iraq and Syria. The U.S. Muslim leaders say militants are exploiting their faith in a failed effort to justify violent extremism. VOA correspondent Meredith Buel reports.
Video

Video Americans' Reaction Mixed on Obama Strategy for Islamic State Militants

President Barack Obama’s televised speech on how the United States plans to “degrade and destroy” the group known as the Islamic State reached a prime-time audience of millions. And it came as Americans appear more willing to embrace a bolder, tougher approach to foreign policy. VOA producer Katherine Gypson and reporter Jeff Seldin have this report from Washington.
Video

Video Authorities Allege LA Fashion Industry-Cartel Ties

U.S. officials say they have broken up crime rings that funneled tens of millions of dollars from Mexican drug cartels through fashion businesses in Los Angeles. Mike O'Sullivan reports that authorities announced nine arrests, as 1,000 law enforcement agents fanned out through the city on Wednesday.
Video

Video Bedouin Woman Runs Successful Business in Palestinian City

A Bedouin woman is breaking social taboos by running a successful vacation resort in the Palestinian town of Jericho. Bedouins are a sub-group of Arabs known for their semi-nomadic lifestyle. Zlatica Hoke says the resort in the West Bank's Jordan Valley is a model of success for women in the region.


Carnage and mayhem are part of daily life in northern Nigeria, the result of a terror campaign by the Islamist group Boko Haram. Fears are growing that Nigeria’s government may not know how to counter it, and may be making things worse. More

AppleAndroid