Spain agrees to EU financial aid plan

Spain's finance ministry says it would use a massive bailout from the European Union to get the nation's banks back on solid ground. Spain Saturday formally applied for assistance from the EU to the tune of up to $125 billion which would be used to "recapitalize" Spain's financial institutions. Economy Minister Luis de Guindos told reporters Saturday the funds were not considered a "full bailout" but would add a level of security and stability to the banking industry. thinkSpain said Sunday the latest assessments concluded that Spanish banks needed about 90 billion euros ($112.6 billion) to erase their combined debt. The rest would be used as a safety cushion. Spain became the fourth and largest European nation to agree to emergency assistance amid the continent's continuing financial crisis. The New York Times said there was an overall sense of relief in Europe and the United States that a plan was in place for Spain. "It is a calming signal at a time when calming signals are badly needed," said Jens Boysen-Hogrefe, an economist at the Kiel Institute for the World Economy. "The uncertainty is still high and bad news can pop up anywhere in the euro area. This is not a final solution."