Spain approves contribution to Greek aid package

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Spain, struggling with its own soaring public deficit, approved Friday its 9.7-billion-euro (12.3-billion-dollar) contribution to the bailout package for debt-laden Greece.

A cabinet meeting signed off on the payment, "which will be financed by public debt," a government statement said.

Eurozone countries and the International Monetary Fund agreed at the weekend to a three-year 110-billion-euro (140-billion-dollar) package of loans to help Greece avoid insolvency.

Madrid's contribution corresponds to 12.24 percent of the Greek rescue package, a sum proportional to its stake in the European Central Bank.

Spain itself is struggling with a weak economy and a ballooning public deficit, which reached 11.2 percent of gross domestic product last year, the eurozone's third largest after Ireland's and Greece's.

It has been hammered on financial markets in recent days after its credit rating was downgraded by Standard & Poor's last week.

© 2010 AFP

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