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Spain can solve bank woes 'step by step' - Schaeuble
June 9, 2012 / 1:40 AM / 5 years ago

Spain can solve bank woes 'step by step' - Schaeuble

BERLIN (Reuters) - German Finance Minister Wolfgang Schaeuble said he believes Spain will be able to solve its banking problems step by step, according to an advance of an interview to appear in Saturday’s Passauer Neue Presse newspaper.

Germany's Finance Minister Wolfgang Schaeuble looks on during an eurozone finance ministers meeting at the EU Council in Brussels May 14, 2012. REUTERS/Francois Lenoir/Files

Schaeuble told the newspaper that Spain’s problems are linked specifically to the collapse of the country’s real estate boom and that the country should not be vulnerable to contagion from Greece.

”The uncertainty has grown large again because it wasn’t possible to form a government there after the Greek elections,“ Schaeuble said. ”The difficult reforms were put on hold and then right away a danger of contagion emerged in financial markets.

“Spain, on the other hand, has a specific problems with the banks. These are in a difficult situation after the collapse of the Spanish real estate boom. That but can be resolved step by step.”

On Friday, Schaeuble had told another newspaper, Handelsblatt, that Spain is doing “everything right” with its reform measures.

“The Spaniards are doing everything right and nonetheless they are coming under market pressure,” Schaeuble told the daily. “We need to manage this ...through close and trusting coordination.”

Spain is expected to ask the euro zone for help with recapitalising its banks at the weekend, sources in Brussels and Berlin said on Friday, becoming the fourth country to seek assistance since Europe’s debt crisis began.

Five senior EU and German officials said deputy finance ministers from the single currency area would hold a conference call on Saturday morning to discuss a Spanish request for aid, although no figure for the assistance has yet been fixed.

Later the Eurogroup, which consists of the euro zone’s 17 finance ministers, will hold a separate call to discuss approving the request, the sources said.

Reporting By Erik Kirschbaum; editing by Ron Askew

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