Spain formally requests banking aid of up to $160b

DHAKA: Spain formally sought a banking rescue of up to 100 billion euros on Monday, kicking off a pivotal week in the battle for the euro zone’s future.

The plea to Spain’s euro zone partners shed little new light on how the help will be delivered to the banks, hobbled by huge, reckless loans that turned sour after a property bubble imploded in 2008.

It came at a key moment in the euro zone crisis after debt markets pushed Spanish and Italian 10-year borrowing rates well above six per cent and raised concerns for the future of the currency union itself.

A full-blown bailout for Spain, the fourth-largest economy in the euro zone, would dwarf the rescues of Ireland, Greece and Portugal and strain the resources of the bloc to the limit, reports The Straits Times.

BDST: 2119 HRS, JUN 25, 2012

Edited by Robab Rosan, Cultural Affairs Editor