Difficlties go on despite financial assistance to Spain

http://www.nikkei.com/article/DGXDZO42481210S2A610C1EA1000/

<Nikkei Editorial on June 12>

Member nations of European Union(EU) has decided to give Spanish Bank financial assistance of 100 billion Euro (about 10 trillion yen) at maxium. We welcome the decision, though belated, of removing the cause for concern on the part of the regional market.

Despite the decision, there are still a mountain heap of problems that have to be solved for stability of European economy. Depending on the result of the Greek parliamentary election to be held on June 17, the countries in the region could be faced with the biggest crisis since the adotption of European common monetary system. The leadership and solidarity among the leaders of the countries are in question from now on.

What’s different from the previous one was that the assistance is focused on banking sector. Spanish banks have come to be  burdened with a lot of  bad loans with the fall of real estate prices and are in need of increasing their capitals. However, the Spanish government suffering from worsening financial conditions had no other choice but to rely the capital injection on other EU member nations. We believe that it was a right decision.

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