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Germany comes round to idea of soft bailout for Spanish banks | In English | EL PAÍS

Germany is beginning to take on board Spain’s idea that a bailout for the Spanish banking system should not be on the same onerous terms as those imposed on Greece, Ireland and Portugal in exchange for their full-scale rescue programs, German sources said Wednesday.

Although Germany remains opposed to Spain’s demands that banks be allowed to directly the tap the European Financial Stability Fund (EFSF) and its permanent successor, the European Stability Mechanism (ESM), which comes into effect at the start of this month, Berlin is ready to consider a compromise that would not breach the current regulations governing those funds.

This could consist of Spain’s state Orderly Bank Restructuring Fund (FROB) receiving European bailout funds and distributing them among the individual banks that require recapitalization. This would in practice comply with the restrictions imposed on the EFSF and the ESM that require national governments to apply on the part of its lenders for funding.

via Germany comes round to idea of soft bailout for Spanish banks | In English | EL PAÍS.

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