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Money flies out of Spain

Money flies out of Spain
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Spaniards alarmed by the dire state of their banks are sending money abroad at the fastest rate since records began in 1990.

The Bank of Spain says 66.2 billion euros left the country in March.

By contrast, in the same month last year 5.4 billion euros came into the country.

Spaniards – worried about the health of their banks, hit by their exposure to a 2008 property crash – have been sending money to deposit accounts in stronger economies of northern Europe.

Spain’s Economy Minister Luis de Guindos however said that reflects the banking sector’s problems in finding external funding rather than deposits flying overseas.

De Guindos also said that the future of the euro would be at stake in the next few weeks in Spain and Italy, adding that the rumours that Spain was negotiating financial assistance with the International Monetary Fund were “complete nonsense.”

“The battle of the euro is being fought right now in Spain and Italy,” he said at an event in Sitges, in the north-eastern region of Catalonia.

He also said Germany should help correct imbalances in the euro zone created by a loose monetary policy over the last decade and by the non-respect by Berlin of the stability and growth pact in 2003.

“We need to correct decisions which favoured Germany… Germany has to assume its part,” he said, adding that decisions in this respect would be taken in the next few days.

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