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Spain gets d30bn for bank bailout

EUROZONE finance ministers have cleared the way to give €30bn to Spain's troubled banks.

The deal came after nine hours of emergency talks in Brussels and it was also agreed that a 2013 deadline for Spain to cut its budget deficit to the EU limit of 3pc could be extended by one year.

Spain's conservative government said today it was being pushed towards a rise in VAT sales tax, which would be a U-turn on its pre-election promises.

Budget minister Cristobal Montoro said the underground economy was largely to blame for an expected increase in value-added tax, which has been requested by the EU.

The International Monetary Fund warned in a report on June 15 that Spanish government revenue may fall short of expectations, and it urged the government to raise VAT immediately.

Meanwhile, there are ongoing discussions in relation to creating a single 'bad bank' to house all its banks' soured assets, similar to Ireland's NAMA.