Spain’s EUR100bn bailout package has lifted shares in Asia and resulted in a 1% gain for the euro against the US dollar and the Japanese yen.
Stock markets in Japan and Hong Kong were up by about 2% on Monday, with traders contributing the rise to the EUR100bn bailout for Spain’s banks, which was agreed on Saturday.
The bailout for Spain, which is targeted at its ailing banking sector suffering from bad loans to the country’s troubled property industry, carries fewer demands for austerity measures like those attached to the bailout of Greece.
Greece will hold a second elections on June 17, but last month the winners of the previous elections failed to form a government. Analysts agreed that the bailout for Spain will buy some time, but added that the crisis is far from over and the focus will shift again to Greece, which is expected to vote anti-austerity parties to power.
“All eyes are still on Greece’s upcoming elections but investors’ worries over the eurozone have eased in the short term,” Andy Du of Orient Futures Derivatives told the BBC.
International credit agencies have signaled the need to shore up Spain’s banks in the recent weeks and months, with Moody’s downgrading the ratings of 16 banks in May. The Spanish government also took control of banking major Bankia last month.
Depositors in Spain, like in Greece,have been pulling their funds from their bank accounts, but this weekend’s bailout is believed to have a calming affect and restore confidence.