IMF's Lagarde welcomes "credible" Eurogroup aid for Spain

IMF chief Christine Lagarde on Saturday hailed what she called the "credible" 100-bln-euro financial lifeline Spain sought from the Eurozone. "I strongly welcome the statement by the Eurogroup, which complements the measures taken by the Spanish authorities in recent weeks to strengthen the banking system. Providing a credible back stop to recapitalize weaker segments of the banking system has been a key recommendation of the IMF's recent Financial Sector Assessment Program (FSAP) conducted in Spain," said Lagarde, the IMF managing director. Lagarde also had words of praise for the operation's scope. "The willingness of Spain's Euro Area partners to financially support the Fund for Orderly Bank Restructuring (FROB) with up to EUR 100 billion is a crucial step for the success of the Spanish authorities' strategy. This scale of proposed financing, which is consistent with the capital needs identified in the FSAP, gives assurance that the financing needs of Spain's banking system will be fully met," she stressed. Earlier Saturday, Spain formally requested a European lifeline of up to 100 billion euros ($125 billion) to save its stricken banks and try to avert a broader financial meltdown. Fellow finance ministers in the 17-nation eurozone accepted the plea in a statement released after an emergency video conference lasting more than two hours. "The Spanish government declares its intention to solicit European financial help for the recapitalization of those banks that need it," Economy Minister Luis de Guindos told a news conference. Successive Spanish governments had vehemently denied they needed any outside aid. Prime Minister Mariano Rajoy's conservative government finally had to bow to rising pressure from world leaders and global markets, which have sent its borrowing costs soaring.