BRUSSELS — Concerns about Spain's crippling financial problems flared again Friday as even news that the country had been approved for a bank bailout loan of up to $122.9 billion failed to blunt bad economic news.
Earlier Friday, finance ministers from the 17 countries that use the euro unanimously approved the terms for a bailout loan for Spain's banks. The banks have been burdened by toxic loans and assets from the collapse of Spain's property market. Investors have for months worried that Spain could not control its deficit during a recession while supporting its stricken financial sector.
Spain is the eurozone's fourth-biggest economy. Many market watchers fear that if it asked for a bailout, the rest of the region could not afford the bill. The country and its banks also have been locked in a debt spiral, where the shaky banking system has been propped up by the indebted government so that the banks could buy more government debt. The loan facility agreed to on Friday was designed to break that spiral.