A look at the 4 eurozone countries with bailouts

Associated Press

(AP) – Europe agreed Saturday to allow Spain to tap a rescue fund of up to (EURO)100 billion ($125 billion) to bail out its troubled banks, which are struggling under the weight of soured real estate loans after a Spanish housing bubble burst. Spanish Economy Minister Luis de Guindos said the country will reveal how much money it needs within coming weeks, after audits of its financial sector are completed.

Spain becomes the fourth country in the 17-nation eurozone to require a bailout after Greece, Ireland and Portugal. But comparing Spain’s bailout to those received by the three other countries in the zone that uses the euro as a common currency is complicated.

While the figure Spain is allotted seems large, it pales in comparison to the size of Spain’s economy _ which is bigger than those of Greece, Ireland and Portugal combined and is the eurozone’s fourth largest. The loans are also destined only for the banks _ not to prop up the country’s own finances, as the previous bailouts were for the other nations.

While conditions will be imposed on Spanish banks that receive funding, de Guindos stressed that Spain faces no outside control of its public finances. The terms of the bailouts for Greece, Ireland and Portugal included humbling visits by foreign financial monitors to make sure they are complying with macroeconomic rules imposed on their handling of their economies.

European leaders, economists and the continent’s business titans said Spain had to find a solution quickly so that it will not be caught up in any potential market turmoil sparked by the Greek elections on June 17. There are concerns that the anti-bailout left-wing party Syriza could become the largest party in the Greek parliament, putting the country’s membership in the eurozone at risk. Syriza has vowed to pull Greece out of its bailout commitments if elected.

Here’s a look at the bailouts for the four eurozone countries that have asked for outside assistance since Europe’s debt crisis hit the continent hard.

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SPAIN

Population: 47 million

Gross domestic product (2011): (EURO)1.1 trillion

Debt as a percentage of GDP (2011): 68.5 percent

Bailout amount: Estimates range from (EURO)40 billion to (EURO)100 billion, but amount will not be set until Spain completes audits of its banking sector. Spain can tap as much as (EURO)100 billion, but de Guindos said that figure provides an ample safety margin. Importantly, Spain’s bailout does not include public finances.

Bailout reason: Spain’s smaller banks serving the domestic market are struggling under the weight of (EURO)185 billion of troubled property assets after a real estate boom went bust. Its largest international banks are not expected to need support. The government is also being forced to pay prohibitively high interest rates to issue debt and refinance existing debt, the country is in its second recession in three years and unemployment is nearly 25 percent, the highest in the eurozone.

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GREECE

Population: 10.8 million

Gross domestic product (2011): (EURO)215 billion

Debt as percentage of GDP (2011): 165 percent

Bailout amount: (EURO)110 billion in the first May 2010 rescue package. A February-March 2012 deal gave Athens another (EURO)130 billion in loans and shaved (EURO)105 billion off its national debt by asking private investors to accept losses on the Greek bonds they hold.

Bailout reason: Greece’s astronomical debts threatened to bankrupt it when investors began demanding higher and higher interest rates to lend them money. The second bailout envisions Greece’s debt dropping to 120.5 percent of GDP by 2020 _ but some think even that high figure is overly optimistic.

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IRELAND

Population: 4.7 million

Gross domestic product (2011): (EURO)156 billion

Debt as a percentage of GDP (2011): 108 percent

Bailout amount: (EURO)67.5 billion agreed to in November 2010.

Bailout reason: Ireland’s rescue of its own banking sector proved too onerous to shoulder and pushed its deficit to a modern European record.

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PORTUGAL

Population: 10.8 million

Gross domestic product (2011): (EURO)171 billion

Debt as a percentage of GDP (2011): 108 percent

Bailout amount: (EURO)78 billion in May 2011

Bailout reason: Poor economic performance, even during boom times elsewhere in Europe, is at the heart of Portugal’s problems; as with Greece, investors began demanding high interest rates to lend money to the country, which was seen as risky, as it became clear it had taken on too much debt.

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Source: Eurostat, CIA World Factbook

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