The deal to bail out Spain’s beleaguered banks shows the world and the markets that Europe has the capacity to take decisive action when needed, the German government’s spokesman said on Monday.
“This is overall a good sign for Europe’s partners and for the markets,” Steffen Seibert told a regular briefing.
“It is a sign that Europe is capable of action and that Europe now has instruments to deal with crisis situations that it did not have one or two years ago,” added Seibert.
Spain on Saturday clinched a lifeline loan of up to 100 billion euros ($125 billion) for its crisis-wracked banks, sending stocks and the euro soaring as traders sighed a collective sigh of relief.
Europe, and its paymaster Germany in particular, had come under intense pressure from around the world to take action to prevent problems in Spanish banks blowing up into a fresh eurozone crisis.
Seibert said it was “a sensible way of doing things” that Spain planned to wait for a review of its banks’ needs before requesting a specific amount of aid from the EU’s bailout funds.
Spain’s financial daily Cinco Dias said Spanish banking sources predicted Madrid would ask for about 60 billion euros, with an absolute maximum of 80 billion euros.
After an emergency video conference lasting more than two hours on Saturday, the 17 eurozone finance ministers issued a statement saying they were “willing to respond favourably” to a Spanish plea for help.
The news marked an about-turn for authorities in Madrid who had insisted they could cope with the banks’ problems with their own money.