Europe Debt, Spain Bailout | featured news

The Spanish government said Wednesday it will decide within the next few weeks whether to ask for outside financial help, noting it might opt for a precautionary line of credit instead of bailout cash.

Spain could ask for financial aid from the euro zone next month and if it does the request would likely be dealt with alongside a revised loan program for Greece and a bailout for Cyprus in one big package, euro zone officials said.

Spain is ready to request a euro zone bailout for its public finances as early as next weekend but Germany has signaled that it should hold off, European officials said on Monday. The latest twist in the euro zone's three-year-old sovereign debt crisis comes as financial markets and some other European partners are pressuring Madrid to seek a rescue program that would trigger European Central Bank buying of its bonds.

Corporate storm clouds gathered over Spain again as two major European companies joined the ranks of those saying they were taking steps to reduce exposure to the recession-hit country.

At the start of another critical week for the euro, the head of the finance ministers that use the currency, Jean-Claude Juncker, reinforced expectations Monday of an initiative to lower Spain’s borrowing costs, which had hit alarming heights.

Spain has for the first time conceded it might need a full EU/IMF bailout worth 300 billion euros ($366 billion) if its borrowing costs remain unsustainably high, a euro zone official said.

Spain’s borrowing costs rose to record levels for a third consecutive trading day on Monday on concerns that a deepening recession and the financing problems of its regions would force the government to seek a full-fledged bailout.

Spain's government said Friday it plans to make its official request for EU aid for its banking sector Monday, as discussions continue on ways to inject European aid funds directly into ailing Spanish banks.

Spain's banks would need 51-62 billion euros ($64-78 billion) in extra capital to weather a serious downturn in the economy, less than a 100-billion-euro aid package offered by the euro zone, independent audits showed on Thursday.

European leaders faced increasing pressure on Thursday to respond to the euro crisis, as Spanish bond yields hit a level that has triggered full bailouts of other nations.