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Title: Spain needs aid for 'more than just banks'
Author: Fraser Trevor
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European assistance to ailing Spain should target the country's entire economy and not just the banking sector, the head of Germany'...

European assistance to ailing Spain should target the country's entire economy and not just the banking sector, the head of Germany's central bank said in an interview published on Saturday. "The banks' balance sheets are a reflection of the overall economy," Bundesbank chief Jens Weidmann told newspaper Boersen Zeitung. "If investors see that the conditions set down for aid to Spain go beyond just the framework of the banking sector, this would also have a positive effect on bond markets." Weidmann said recent announcements by the Spanish government, financial problems in the country's regions and its high unemployment rate -- a record 24.4 percent in the first quarter of 2012 -- show Spain still has major issues to resolve. Spanish Prime Minister Mariano Rajoy on Wednesday announced a 65-billion-euro ($80-billion) austerity package demanded by Brussels in exchange for rescuing Spanish banks with bailout loans of up to 100 billion euros. Eurozone finance ministers agreed this week to release an initial payout of 30 billion euros by the end of the month and a second of around 45 billion euros in mid-November. Three eurozone countries -- Greece, Portugal and Ireland -- have so far received bailouts from their partners. Spain will be the fourth to do so, but the first to have aid injected into its banking sector rather than the government itself.

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