News Column

IMF Observers Headed to Spain to Review Bank Bailout Plan

Oct. 4, 2012
Bank of Spain in Madrid, Spain.
Bank of Spain in Madrid, Spain.

The International Monetary Fund (IMF) said Thursday it would send observers to Spain later in October to write a report about the European Union's bank bailout plan.

The report is to be presented to the Spanish government and the EU Commission, said IMF spokesman Gerry Rice in Washington.

Spain has received pledges totaling up to 100 billion euros (130 billion dollars) for its troubled banking sector. The government, however, does not expect the banks to need more than about 40 billion euros.

In a report on the state of Spanish banks presented by the Bank of Spain on Friday, consulting company Oliver Wyman estimated the total needs of Spanish banks aat 53.7 billion euros.

Spain is not seeking help for its debts, said Rice. The focus of the IMF in Spain will be limited to the banking sector. The observers are to carry out their work from October 15-26.

The recession possibly will last longer in Spain than previously expected, the IMF said. A prognosis by the central banks expects the economy to shrink from 1 per cent to 1.5 per cent. That is two to three times more than the Spanish government projects in its proposed budget for 2013.

Source: Copyright 2012 dpa Deutsche Presse-Agentur GmbH

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