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| Eurozone ministers 'to discuss Spain bank bailout' | Eurozone ministers 'to discuss Spain bank bailout' |
| (about 1 hour later) | |
| Eurozone finance ministers are to hold a conference call to discuss a bailout for Spanish banks, the BBC understands. | Eurozone finance ministers are to hold a conference call to discuss a bailout for Spanish banks, the BBC understands. |
| EU sources say Madrid could formally request financial assistance for its troubled banks this weekend. | EU sources say Madrid could formally request financial assistance for its troubled banks this weekend. |
| So far Spain has denied reports that an announcement on a European rescue plan for its banks is close. | So far Spain has denied reports that an announcement on a European rescue plan for its banks is close. |
| The International Monetary Fund (IMF) is estimating that Spain's banks need a cash injection of at least 40bn euros ($50bn; £32bn). | The International Monetary Fund (IMF) is estimating that Spain's banks need a cash injection of at least 40bn euros ($50bn; £32bn). |
| The IMF said on Friday that a "stress test" showed Spain's financial sector was well managed but "vulnerable". | The IMF said on Friday that a "stress test" showed Spain's financial sector was well managed but "vulnerable". |
| The eurozone finance ministers' conference call was expected to start at 1500BST. | |
| In an interview on Portuguese radio, European Central Bank Vice-President Vitor Constancio said: "It is expected that Spain will formulate a request for aid exclusively for banks recapitalisation. | In an interview on Portuguese radio, European Central Bank Vice-President Vitor Constancio said: "It is expected that Spain will formulate a request for aid exclusively for banks recapitalisation. |
| Jean-Claude Juncker, who chairs the Eurogroup of finance ministers, said: "The solution must come quickly." | Jean-Claude Juncker, who chairs the Eurogroup of finance ministers, said: "The solution must come quickly." |
| Correspondents say Spain is under pressure from Brussels and Germany to act ahead of next weekend's elections in Greece, which has led to fears of a break-up of the eurozone. | Correspondents say Spain is under pressure from Brussels and Germany to act ahead of next weekend's elections in Greece, which has led to fears of a break-up of the eurozone. |
| "If Spain feels overwhelmed by its financial needs, it should use the instruments which have been created for that," Jens Weidmann, the head of the German central bank, said in an interview with a German magazine. | "If Spain feels overwhelmed by its financial needs, it should use the instruments which have been created for that," Jens Weidmann, the head of the German central bank, said in an interview with a German magazine. |
| However on Saturday morning, the Spanish government restated its position that it does not need outside help to shore up its banks. | However on Saturday morning, the Spanish government restated its position that it does not need outside help to shore up its banks. |
| "There has been no change," a spokeswoman from the economy ministry in Madrid told AFP news agency. | "There has been no change," a spokeswoman from the economy ministry in Madrid told AFP news agency. |
| Bad loans | Bad loans |
| Spanish Prime Minister Prime Minister Mariano Rajoy has insisted that any decision will come after the results of two independent audits of the Spanish banking system, which are due out within two weeks. | Spanish Prime Minister Prime Minister Mariano Rajoy has insisted that any decision will come after the results of two independent audits of the Spanish banking system, which are due out within two weeks. |
| The audits will produce a figure of how much money, in total, is needed to prop-up Spain's banking sector. | The audits will produce a figure of how much money, in total, is needed to prop-up Spain's banking sector. |
| Major banks are struggling to deal with toxic property loans. The country's fourth-largest lender, Bankia, recently asked for a total of 23.5bn euros (£19bn) to help deal with its exposure to the construction market. | Major banks are struggling to deal with toxic property loans. The country's fourth-largest lender, Bankia, recently asked for a total of 23.5bn euros (£19bn) to help deal with its exposure to the construction market. |
| Some estimates have put the total amount of bad loans across the banking sector at about 180bn euros. | Some estimates have put the total amount of bad loans across the banking sector at about 180bn euros. |
| Spain's economy minister will join eurozone counterparts for a very unusual conference call this afternoon. The topic of conversation will be a possible European rescue deal for Spain, money that will be destined for Spanish banks. | Spain's economy minister will join eurozone counterparts for a very unusual conference call this afternoon. The topic of conversation will be a possible European rescue deal for Spain, money that will be destined for Spanish banks. |
| What is still unclear is how the money will be passed to Spain, how much, and when a formal plea from Spain's government will be made. | What is still unclear is how the money will be passed to Spain, how much, and when a formal plea from Spain's government will be made. |
| Throughout the morning, European leaders have maintained the pressure on Madrid. The thinking, is that leaders want to speed up a decision on Spain's banks to avoid more uncertainty for the eurozone when the Greeks go to the polls next weekend. | Throughout the morning, European leaders have maintained the pressure on Madrid. The thinking, is that leaders want to speed up a decision on Spain's banks to avoid more uncertainty for the eurozone when the Greeks go to the polls next weekend. |
| Spain would prefer any EU funding to be targeted directly at its banks, rather than at the government. It is keen to avoid what is seen as the humiliation and demands for stringent cuts, which came with the full-blown bailouts for Greece, Portugal and Ireland. | Spain would prefer any EU funding to be targeted directly at its banks, rather than at the government. It is keen to avoid what is seen as the humiliation and demands for stringent cuts, which came with the full-blown bailouts for Greece, Portugal and Ireland. |
| But because Madrid has already announced tough financial reforms, it is likely that a deal would carry limited conditions, says the BBC's Tom Burridge in Madrid. | But because Madrid has already announced tough financial reforms, it is likely that a deal would carry limited conditions, says the BBC's Tom Burridge in Madrid. |
| A downgrade of Spain's creditworthiness by rating agency Fitch earlier this week has been seen by some as adding to the urgency of shoring up Spain's finances. | A downgrade of Spain's creditworthiness by rating agency Fitch earlier this week has been seen by some as adding to the urgency of shoring up Spain's finances. |
| European leaders have to make difficult decisions to steer the eurozone away from crisis, US President Obama said on Friday. | European leaders have to make difficult decisions to steer the eurozone away from crisis, US President Obama said on Friday. |
| He said a deep new recession in Europe would have an impact on the US economy. | He said a deep new recession in Europe would have an impact on the US economy. |
| Greece's future in the eurozone was a matter for the Greek people, he said, but "further hardship" must be expected if the country chose to leave the euro. | Greece's future in the eurozone was a matter for the Greek people, he said, but "further hardship" must be expected if the country chose to leave the euro. |
| Greeks will go to the polls on 17 June to try and end a political impasse that eurozone leaders say is harming Greece's ability to tackle its economic crisis. | Greeks will go to the polls on 17 June to try and end a political impasse that eurozone leaders say is harming Greece's ability to tackle its economic crisis. |