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“Government to nationalise savings banks who fail to clean up balance sheets by September," reports El País. Spain’s savings banks, or cajas, have been drastically affected by bad loans to building developers. Amidst concern about an Irish style sovereign debt crisis, Spanish Minister of Finance Elena Salgado has announced the restructuring of the debt-laden cajas, forcing to seek private refinancing as conventional banks. Those cajas that fail to raises sufficient funds will be provided an estimated 25 to 50 billion euros in government fund. In its editorial, the Madrid daily remarks that this "radical initiative" should help to "calm the markets" and reduce pressure on Spain’s sovereign debt.
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