Eurozone approves aid package for Spain

Eurozone finance ministers have agreed to shore up Spain’s crisis-stricken banks by providing them with an aid package in a bid to avert the collapse of the single currency area’s fourth-biggest economy.

The ministers on Tuesday announced plans to offer a 30-billion-euro (USD 36.88-billion) bailout to ailing Spanish banks, stating that the financial aid will be available by the end of the month.

According to Eurogroup head Jean-Claude Juncker, the final agreement for the loan is set to be signed on July 20.

Meanwhile, the European Union finance ministers have agreed to give Madrid an extra year until 2014 to reduce its budget deficit.

“We have a tentative deal on the bailout conditions for a bailout of Spanish banks,” Dutch Finance Minister Jan Kees de Jager said, adding that, “The total will likely be 100 billion euros (USD124 billion).”

The development came as Spain’s borrowing rate rose above the critical level of 7.0 on Monday despite its efforts to get a grip on its budget.

Battered by the global financial downturn, the Spanish economy slid into recession in the second half of 2008, taking with it millions of jobs.

Various EU member states have been struggling with a deep economic stagnancy since the bloc’s financial crisis began roughly five years ago, forcing some of the most affected nations to adopt unbearable austerity measures to be eligible to get the EU bailouts.