Spain to make early payback on Europe aid package

MADRID (AP) — Spain will start paying back early part of the 41 billion-euro ($55 billion) aid package it received from the European Union in 2012 to prop up ailing banks and prevent the nation from descending into financial chaos, Deputy Prime Minister Soraya Saenz de Santamaria said Friday.

Spain will pay back 1.3 billion euros ($1.8 billion) soon, even though payments were not due on the rescue funding until 2022, she said. Spain's banks were hit hard with bad loans and saddled with property after a prolonged real estate boom burst. Amid intense international fears that the country's financial system could collapse, the EU approved the aid package.

Saenz de Santamaria said the government also approved an economic stimulus package with 40 measures that it hopes will generate economic stimulus of 11 billion euros ($15 billion). The approved measures reduce what banks collect from credit and debit card purchases in a bid to help small and medium size businesses, provide new incentives for vehicle purchases and increase credit lines for small and medium size businesses.

Prime Minister Mariano Rajoy said last weekend that Spain will lower its corporate tax rate from 30 percent to 25 percent but Saenz de Santamaria did not mention that plan or give guidance on when the tax break would be approved.

Related Headlines

  • Mario Draghi

    Draghi keeps door open for ECB action

    European Central Bank President Mario Draghi said the bank needed to be on its guard against a "negative spiral" of low inflation that could drag down the economy — and it ... 

  • Eurozone inflation drop seals deal for ECB

    Another unexpected drop in inflation in the 18-country eurozone has made it a near certainty that the European Central Bank will act this week to support the economy. 

  • ECB surprises with rate cuts, new stimulus plan

    The European economy needs help. Most people didn't expect it would arrive quite this quickly. The European Central Bank cut interest rates Thursday and announced a program ... 

  • Portugal bank collapse and rescue raises questions

    A new Portuguese bank appeared Monday, born from the ruins of a collapsed business empire, and declared on its website that it was now "stronger and safer." Investors rattled ... 

Find the best rates

Find your future job here