Spain faces bailout delay

EU officials are refusing to issue Spain with a bailout until it seeks assurances about the amount required by its banks.

Spain’s Economy Minister Luis de Guindos announced in July that €30 billion of emergency funds from Brussels would be received within days.

But the EU is yet to release the money after questioning the exact amount needed. It is understood to be awaiting the results of a comprehensive audit of Spain’s banking sector before agreeing to the deal.

That is expected to be completed by the end of September, although Brussels may wait until the end of November before committing the funds.

On Friday, Bankia announced losses of €4.5 billion up until June, leaving it with less than the minimum capital requirements and highlighting its desperate need for cash.

In the absence of a full bailout, Spain has been forced to prop up the ailing lender using money from the Orderly Bank Restructuring Fund (FROB), run by the Bank of Spain and the Finance Ministry.