With yet another euro bailout agreement failing to calm markets, causing Spain's borrowing costs to soar back into the danger zone, European Union nations have accelerated their latest rescue plan for Spain's shaky banks, reports the New York Times. Finance ministers from 17 eurozone nations agreed late last night to have $37 billion in bailout funds available for Spain by the end of the month and to give the country an extra year to get its budget deficit, which now stands at 6.3%, down to 3%.
Officials say another $85 billion for Spanish banks will probably follow this fall, after a review of the sector is completed, but there will be plenty of strings attached. The countries helping to bail the banks out agree that "financial sector reforms in Spain must be ruthlessly implemented," Holland's finance minister said. "These reforms include notably a cap on salaries of bank executives and a ban on bonuses." Before the meeting, the chief of the European Central Bank expressed confidence that an EU-wide system of banking supervision could be up and running before the end of the year. (Read more eurozone stories.)