Another 100 billion!

The Herald reports:

Spain formally requested a European lifeline of up to 100 billion euros (NZ$162 billion) overnight to save its stricken banks and try to avert a broader financial catastrophe.

Fellow finance ministers in the 17-nation eurozone accepted the plea in a statement released after an emergency video conference lasting more than two hours.

This could be the start of something big.

It was a dramatic climbdown for Spain, where successive governments have hotly denied any need for outside aid.

Prime Minister Mariano Rajoy’s conservative government finally had to bow to rising pressure from world leaders and more importantly the markets, which have sent its borrowing costs soaring.

Defying desperate efforts by eurozone policymakers, the emergency has spread to the region’s fourth-biggest economy – Spain’s is twice the size of that of Greece’s, Ireland’s and Portugal’s combined.

They are ten times the size of NZ, population wise.

Unemployment in Spain is at 25%, and departmental budgets have been reduced 17% across the board, plus tax increases for the “rich”. They are tracking towards reducing their deficit, and exports are about to over-take imports for the first time.

If Spain falls, the Euro will fall as Spain is too big to bail out entirely.