With an end-of-year deadline looming, Spain is rushing to consolidate and recapitalise its regional savings banks – the cajas.
They are carrying huge debts from the bursting of the country’s property bubble.
Not wishing to be pushed down the same financial bailout path as Ireland Madrid is forcing the cajas to merge and is giving most of them financing from its Fund for Orderly Bank Restructuring.
The number is being cut from 45 to just 17.
Analysts at UBS estimates Spain’s banking sector would need between 70 and 120 billion euros to strengthen capital and provisions.
One way that the Spanish government is raising cash is through the lottery by selling off 30 percent its national lottery organisation – best known for the ‘El Gordo’ or ‘Fat One’ Christmas draw.
Perhaps reflecting the current state of Spain’s economy, spending on the lottery increased slightly this year after falling during the previous two years.