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EU ministers meet to solve Spain crisis

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July 9, 2012, 4:47 p.m. | World — by Associated Press

In this March 13, 2012 file photo, Spain's Economy Minister Luis de Guindos speaks on his phone during a meeting of EU finance ministers at the EU Council building in Brussels.
© AP

Associated Press

Associated Press

BRUSSELS — European finance ministers are to use this week's meetings in Brussels to attempt to secure Spain's teetering economy, with progress expected on the bailout loan for the country's stricken banks and a relaxation of the government's financial targets.

The 17 countries that use the euro have committed to support a loan for the banks of up to €100 billion ($124 billion), but the precise amount needed may not be known until September, when the results of all the bank inspections are in, Simon O'Connor, an EU spokesman, said Monday.

Monday evening, the so-called eurogroup of finance ministers will attempt to reach an agreement on what conditions will be attached to the bailout loan, which will codified in a "memorandum of understanding" to which Spain must agree. The 17 ministers — some of whom will need to get approval of the agreement from their parliaments — will probably meet again, later in July, to give final approval to that document.

Then Tuesday, in a choreographed companion maneuver, finance ministers from all 27 European Union countries are expected to give Spain an extra year — until 2014 — to meet its budget deficit target of 3 percent. The European Commission, the EU's executive arm, has formally endorsed that proposal.

The eurogroup ministers will also meet Greece's new finance minister, Yannis Stournaras, for the first time Monday for preliminary discussions on whether to adjust conditions accompanying the country's bailout.

Officials say no formal decisions are expected from the meeting Monday.

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