Spain is expected to request EU bank aid on Saturday, making it the fourth country reliant on a European bail-out. A conference call has been scheduled for the morning to discuss a Spanish request for financial aid.
According to the Independent EU and German sources have said Spain will request aid on June 9, and the Eurogroup will issue a statement following the conference call. An unnamed German official was quoted: "The government of Spain has realised the seriousness of their problem."
The official stressed that an agreement needs to be reached prior to the Greek elections on June 17 as the possibility of a Greek euro exit will send the markets into panic.
The Telegraph reported that Spanish Prime Minister Mariano Rajoy "is expected to reveal that his banks need funding, but not agree on the timing or scale of the bailout needed." Meanwhile Angela Merkel has said she won't force Spain to take a bail-out. The Economic Times reported earlier in the week that Merkel's spokesman said "Spain knows where to look for aid if it's needed."
Spain is keen to avoid the full weight of austerity measures imposed on other countries reliant on EU bailouts, which have already proven to restrict growth. However it will move one step closer to losing sovereignty if assistance is requested.