It is not a bailout, but a nearly condition-free loan. This is the message sent by the Spanish government after euro zone finance ministers agreed on Saturday to lend Madrid up to 100 billion euros for recapitalising its banks.
Following weeks of denying the need for financial assistance, Spanish PM Mariano Rajoy gave in to international pressure. He requested a rescue package that he portrayed as a triumph, but which caused outrage among Spanish citizens.
The Spanish authorities insisted that European aid does not come with additional austerity measures for citizens. Only the banking system will have to accept certain conditions in exchange for the money. But experts believe that a bailout will make it more difficult for Rajoy’s government to meet its deficit targets, potentially leading to more cuts.
Europe is nervous awaiting the outcome of the Greek elections on the 17th of June, which may see the anti-bailout extreme left party Syriza rising to power. A potential Greek euro exit would then become a more likely scenario, with possible contagion effects to the rest of the Eurozone.
Shortly after the announcement, Rajoy left for Poland to watch Spain’s first Euro cup football game. The trip caused anger among many Spaniards who considered it inappropriate.