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Spain's PM Rajoy: bank rescue deal is 'victory for euro'

Spain's PM Rajoy: bank rescue deal is 'victory for euro'
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Spain’s Prime Minister Mariano Rajoy has hailed the European deal to shore up his country’s banks.

It was a victory for the euro, the EU and Spain’s economy, he said.

He defended his new government’s record in sorting out public finances and carrying out structural reforms.

“If we hadn’t done what we have done over these past five months, what happened yesterday would have been an external intervention in the Kingdom of Spain,” he said.

The government stresses the eurozone’s loan will be restricted to helping the financial sector. Madrid has been unable to bail out the banks itself as the cost of borrowing has become too expensive.

The prime minister argues the deal saves the wider economy.

“Yesterday was a victory for the credibility of the euro, yesterday was a victory for the European Union, and yesterday was a victory for the possibility that Spain quickly recovers the levels of credit necessary to improve investment and employment,” said Rajoy.

A maximum of 100 billion euros will be available for Spain’s banks. The exact amount will be determined after two external audits are completed. Madrid argues what is on offer is more than enough.

“I am the one who put pressure (on European partners) because I wanted a line of credit to resolve a very important problem that we have here and that everyone knows exists,” Rajoy added.

Some Spanish banks had borrowed large amounts on international markets to lend to property developers and home buyers. The property crash and recession left them with billions of euros of bad loans.

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