Eurozone agrees to move quickly on Spain, Greece

Troubled eurozone nations agreed to act quickly to save Spain's banks, and to send international creditors to Greece for an update from the new government.

The IMF meanwhile called on Thursday for the euro area to establish full banking union, and for the European Central Bank to adopt more demand-generating stimulus policies to help tackle the crisis.

Adding to the sense of urgency, ratings agency Moody's downgraded the credit ratings of 15 of the world's largest financial institutions, citing exposure risk and Europe's economic woes.

Spain's government will formally request eurozone financial assistance on Friday, said France's new Finance Minister Pierre Moscovici after Madrid indicated it could need up to 62 billion euros to save its distressed banks.

Once Spain had lodged its request, officials from the European Commission, the European Central Bank and the International Monetary Fund would fly to Madrid for talks on restructuring the Spanish banking sector, he added.

They would help the eurozone decide whether to forward the loan through the existing eurozone rescue fund, the European Financial Stability Facility (EFSF), or its soon-to-be successor, the European Stability Mechanism (ESM).

The EU's Economic Affairs Commissioner Olli Rehn said he hoped to see Spanish bank aid preparations wrapped up by July 9.

At the same time, the so-called "troika" of international creditors will return to Athens for the first time since March, IMF chief Christine Lagarde said at the close of talks with the 17 Eurogroup finance ministers.

The new Greek government said Thursday it was hoping to re-negotiate parts of the original loan agreement.

It said it wanted "to revise terms of the loan agreement without endangering the country's European course and its place in the euro."

But eurozone leader Jean-Claude Juncker said the creditors would simply be looking to "update" accords struck against 130 billion euros of loans -- plus a 107-billion-euro write-down of privately held debt.

Juncker, the Luxembourg premier who heads the Eurogroup, said a billion euros of blocked funds for Greece would be released "by the end of the month."

Earlier Thursday, Spain announced that its crisis-torn banks needed up to 62 billion euros ($78 billion) to survive a severe financial slump -- considerably less than the maximum 100 billion euros originally foreseen in a June 9 eurozone rescue offer.

Prime Minister Mariano Rajoy, speaking in Brazil, said European rescue funds were needed "as soon as possible".

Spain's assessment of its needs was based on two independent banking audits: one by German firm Roland Berger, the other from US firm Oliver Wyman.

The audits tested 14 top banking groups in a likely "baseline" scenario and a "stressed" outcome of a slumping economy and real estate sector.

Madrid's single currency partners had offered a credit line of up to 100 billion euros for Spanish banks hammered by a 2008 property market crash -- although Finland said it wanted Spanish bank shares handed over as collateral.

Thursday's meeting of eurozone finance ministers in Luxembourg will widen Friday to include Britain and other non-euro states. They will debate calls to introduce a tax on financial transactions.

The meeting is part of the run-up to a two-day European Union summit, which opens next Thursday.

In Rome on Friday, the leaders of the eurozone's big four -- Germany, France, Italy and Spain -- will hold their own preparatory talks. They are expected to elaborate a plan for the eurozone rescue funds to intervene more easily on bond markets.

Italian Prime Minister Mario Monti warned in comments published Friday that failure to reach a deal at next week's EU summit would leave the bloc open to attack by speculators.

The technocratic leader also predicted rising public anger if the economic situation deteriorated in an interview with leading European newspapers, which included Britain's Guardian and Italy's La Stampa.

"To emerge in good shape from this crisis of the eurozone and the European economy, ever more integration is needed," he insisted in comments published in Friday's Guardian.

Also Friday German Foreign Minister Guido Westerwelle said the crisis shows that Europe needs to speed up its integration, and pushing forward on that path will reassure markets.

"The crisis has shown the need to speed up integration," Westerwelle was quoted as saying in the French daily Le Figaro.

He said it was a mistake creating the single currency without sufficient coordination of economic and financial policies of eurozone countries, and the solution lay in committing to finishing the job.

"No investor will bet on Europe if there isn't the sentiment that it believes in itself and that it is working to move forward," he added.

Loading...

Editor’s note:Yahoo Philippines encourages responsible comments that add dimension to the discussion. No bashing or hate speech, please. You can express your opinion without slamming others or making derogatory remarks.

  • Super typhoon expected to weaken before reaching Philippines
    Super typhoon expected to weaken before reaching Philippines

    HAGATNA, Guam (AP) — A super typhoon blamed for the deaths of at least four people on islands in the western Pacific Ocean has moved into the open sea and is expected to significantly weaken before reaching the Philippines later this weekend. …

  • Philippine leader says 'worst airport' now looking much better
    Philippine leader says 'worst airport' now looking much better

    President Benigno Aquino Wednesday hailed renovations to the Philippines' main international airport, expressing optimism it would soon shake off its ranking on one website as the world's worst airport. Almost a year after he personally apologised for the failure of air-conditioning at Terminal 1 of Manila's international airport, Aquino said the facility appeared to be completely different. "It is like I have entered a completely different airport," he told reporters as he inspected the …

  • Volkswagen opens new showroom along Quezon Avenue
    Volkswagen opens new showroom along Quezon Avenue

    Volkswagen opened a new showroom along Quezon Avenue, which is now the automotive row of Northern Metro Manila.At the Innauguration was Chief Operating Adviser Klaus Schadewald, Branch Manager Bob Anthony Palanca, Volkswagen Philippines: President and CEO John Philip Orbeta and General Manager Nemesio Solomon, Jr. This new showroom has the latest Volkswagen Interactive Showroom applications. ... …

  • The Race to Global Greatness - YGP6
    The Race to Global Greatness - YGP6

    Yamaha Motor Philippines (YMPH) recently held the first leg of the Yamaha Grand Prix 6 at the SM Sta. Rosa compound in Laguna. The racing categories for this year are the following: Automatic Inter-Club RaceUnderbone Inter-Club Race115 Superstock ATVega Force i SuperstockSniper 150 Open UB130 Open UBMio 125 MX i …

  • Volkswagen opens new showroom along Quezon AvenueVolkswagen opened a new showroom along Quezon Avenue, …
    Volkswagen opens new showroom along Quezon AvenueVolkswagen opened a new showroom along Quezon Avenue, …

    Volkswagen opened a new showroom along Quezon Avenue, which is now the automotive row of Northern Metro Manila.At the Innauguration was Chief Operating Adviser Klaus Schadewald, Branch Manager Bob Anthony Palanca, Volkswagen Philippines: President and CEO John Philip Orbeta and General Manager Nemesio Solomon, Jr. This new showroom has the latest Volkswagen Interactive Showroom applications. ... …

  • Nissan launches its “Virtual to Reality” GT Academy here in the Philippines
    Nissan launches its “Virtual to Reality” GT Academy here in the Philippines

    The Filipino Gran Turismo gamer just became eligible to become a Pro Race Car driver as Nissan Philippines Inc. launched its GT Academy here in the Philippines. The object is to find the best Grand Turismo players in both the online qualification process and participating in the live events after which they’ll compete with each other in National Finals to see who gets to attend the 3 month Race camp.  The winner gets to stay in the UK near Silverstone and will take part in UK national and club …

  • Osmeña wants electricity exempted from VAT
    Osmeña wants electricity exempted from VAT

    Sen. Sergio Osmeña III wants electricity to be exempted from value added tax under a proposed measure that will amend the National Internal Revenue Code of 1997 and the Reformed VAT Law. He said the move aims to ease the burden of the public in paying high electricity rates in the country. “VAT on electricity is another burden on the already over-taxed shoulders of our people, especially those whose incomes are barely enough to cover their basic needs. Osmeña, chairman of the Senate …

  • No lotto draws starting tomorrow until Easter Sunday
    No lotto draws starting tomorrow until Easter Sunday

    No lotto tickets will be sold and no lotto draws made starting tomorrow, Maundy Thursday, up to Easter Sunday in observance of Holy Week. In a statement, Jose Ferdinand Rojas II, acting Philippine Charity Sweepstakes Office (PCSO) chairman and general manager, said the selling of lotto tickets and lotto draws will resume on April 6,  Monday. “We thank all Lotto players for your trust and confidence in the PCSO games, and we count on your continued support of our efforts to raise funds for …

POLL

Should Aquino be held accountable over the Mamasapano operations?

Loading...
Poll Choice Options