Spanish Bank Bailout

Following an uncertain autumn over the fate of Spain’s banks, a deal has finally been struck. Photograph: Olivier Holmey

Following an uncertain autumn over the fate of Spain’s banks, a deal has finally been struck. Photograph: Olivier Holmey

Spain has earlier today made a formal request for a bank bailout, in a move set to reassure the financial sector that Madrid is intent on recapitalising its banks. Although already agreed to in principle this summer, the announcement led to instability on the markets, with German bond prices falling and the euro’s value against the dollar rising to a six-week high. It is as yet unclear whether this was due to a mistaken reading of the request, which might have been taken by some to be the much broader and dreaded sovereign bailout.

Germany’s finance minister Wolfgang Schäuble has repeatedly declared himself in favour of a step by step, tailored solution to the euro zone crisis, opposing the idea of extending Greek concessions to Portugal and Ireland, and of providing as comprehensive a bailout package to Spain.

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