Eurozone finance ministers agreed Tuesday to offer Spain 30 billion euros this month to help its distressed banks as they raced to stay ahead of market scepticism. After nine hours of talks, Jean-Claude Juncker, the Luxembourg premier who also heads the Eurogroup , said a memorandum of understanding for Spain would be formally signed “in the second half of July,” with 30 billion euros ($37 billion) available by the end of the month. Juncker, who has been in the job since 2005, was reappointed by the 17 ministers during talks Monday which ended well after midnight. Spain, under increasing pressure as sceptial markets pushed its borrowing costs dangerously high again, had called for up to 100 billion euros in direct aid at a June 28-29 “breakthrough” EU summit. Aiming to keep the momentum going, ministers also agreed to extend a deadline for Spain to cut its public deficit to the EU 3.0 percent limit by one year to 2014 because of the difficult economic conditions Spain faces. At the same time, however, Juncker stressed that Madrid must implement measures needed to bring its public finances into line with EU norms. EU economic affairs commissioner Olli Rehn said Spain’s public deficit — the shortfall of revenue to spending — was now expected at 6.3 percent of Gross Domestic Product this year, 4.5 percent in 2013 and then 2.8 percent in 2014. Spain in May revised its 2011 public deficit figure, saying that it stood at 8.9 percent, up from 8.51 percent reported earlier and way above the original 6.0 percent target for the year.
