AREA finance officials of the Euro Zone have given their collective nod on Tuesday for a rescue fund aimed at lifting Spain’s banks from a looming collapse, saying that by end of July, around $37 billion can be tapped.
The finance leaders belonging in the seventeen euro-using nations will go back to Brussels July 20 to iron out the final draft agreement, having initially gained the permission of their parliaments, Euro Zone big boss Jean Claude Junker on Tuesday said.
As part of a deal with the Spanish government, all the 27 EU nation finance officials are expected to approve on Tuesday a 1 year extension that runs until mid-2014, regarding the deadline for Spain to attain a deficit of at least three percent.
According to Dutch Finance Minister Jan de Jager, they have a tentative agreement on the financial rescue program’s terms for Spain’s major financial institutions and the the total will be around 100 billion euros. De Jager added that they are hoping the deal can be finalized with the next few days.
The bailout’s exact figure will likely be kept under wraps until two months from now, when individual assessments of various types of Spanish financial institutions have been wrapped up.
Spain’s partners, De Jager pointed out, have agreed that Spain’s monetary sector restructurings must be aggressively imposed. These will largely involve a cap on bank executives’ wages and a moratorium, if not total ban, on their individual bonuses.
Falling after Chinese data
The United States greenback inched higher versus the euro as markets looked ahead of the highlights of the EU’s deal to extend aid to Spain to seek for further solutions, with appetite for risk kept under control after bleak manufacturing data coming from China.
The euro currency fell back under $1.202 in Asian sessions, buying $1.2286 as compared with $1.2311 Monday in late North American trade.
The currency’s fall came despite statements by the Eurogroup that backed providing Spain more legroom to solve its financial dilemma with chief Jean Claude Juncker stressing that a total of 30 billion euros can be available to help Spain’s banks.
Meanwhile, the outcome of the Eurogroup talks came as Madrid’s ten-year bond output crawled back above the dreaded seven percent mark Monday, reversing declines on the heels of a recent summit of EU officials.
According to RBC Capital Markets senior currency expert Sue Trinh, “major queries that surround secondary-market intercessions and preferred trade status beyond Madrid’s bank bailout still hang in the air.”
Information posted earlier by Customs officials of Beijing revealed that while the government’s exports last month exceeded predictions, the 6.4 percent rise in imports dipped as initially expected.