Germany Approves Spanish Bank Bailout

Posted July 19th, 2012 at 3:20 pm (UTC-5)
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The German parliament has approved the eurozone's $122 billion bailout for the struggling Spanish banking system.

Lawmakers in Germany, the currency union's most robust economic power, have grown increasingly wary of approving more assistance for debt-ridden countries in the 17-nation eurozone. But they voted overwhelmingly for the bank rescue package Thursday after Finance Minister Wolfgang Schaeuble told them the financial stability of the currency bloc as a whole would be threatened if the loans were rejected.

He said the Spanish government needed help for the country's banks in order to keep its own borrowing costs from increasing to the level that forced Greece, Ireland and Portugal to secure international bailouts.

Spain is the eurozone's fourth largest economy. Its borrowing costs have moved sharply higher, a signal that investors are concerned about the country's financial state.