The IMF, the European Commission and the ECB will monitor the rescue of the Spanish banks

• The yield of Spanish bonds is rising again

• Joseph Stiglitz: The plan for Spain may not work

The specialists of the International Monetary Fund (IMF), of the European Central Bank (ECB) and of the European Commission will monitor the bailout of up to 100 billion Euros intended to rescue the Spanish banking system, according to the announcement made yesterday by the officials in Brussels.

Amadeu Altafaj, the spokesperson of the European Commissioner for the Economy, Olli Rehn, said: "All the members of Eurogrup, including the Spanish authorities, have indicated that they want the IMF to be part of the oversight commission, so they can benefit from the expertise of the Fund". Altafaj mentioned that the IMF would not lend to Spain, in this case its role being "minor".

The evaluation, by the European Commission, of the capital requirements for the Spanish banking system and the conditions of the loan will not only be conducted together with the ECB and the IMF, but also with the European Bank Authority (EBA).

Yesterday, the German Finance minister, Wolfgang Schaeuble reminded that the monitoring of Spain only concerns the restructuring of the banking sector, which makes the difference between Portugal, Ireland and Greece, which required macroeconomic adjustment programs.

"We are talking about the Spanish banks, not about the country's fiscal policy, because in that regard, Spain is on the right way", Schaeuble said.

The Spanish Treasury said that the agreement for the banking sector will not influence the country's borrowing schedule for this year.

On Saturday, Spain requested a bailout of 100 million Euros - in foreign aid from the European Union for the rescue of its banks. The amount is 2.7 times larger than the estimate of the IMF for the Spanish banking sector.

The yield of the Spanish bonds yesterday resumed its rise, as investors became cautious while waiting for the details of the bank bailout plan to surface. The yield of 10-year bonds rose by 15 basis points (0.15%) over Friday, to 6.36% at 14:18 on the London market. The advance had previously been 24 basis points - the biggest since March 30th, so far.

The yield of 2-year Spanish bonds rose 17 basis points, to 4.45%, and that of 30-year bond increased 23 basis points, to 6.7%.

Investors want to know whether the money will be made available to Spain via the European Stability Mechanism (ESM) or through the temporary emergency fund of the European Financial Stability Fund (EFSF).

• Fitch: The bailout for the Spanish banks covers even the most pessimist scenario

The European plan of 100 billion euros for the Spanish banks covers even the most pessimistic scenario concerning the country, according to Spanish rating firm Fitch, which estimated that 60 billion Euros would be needed for recapitalization. The agency considers that the available funds also cover the need for recapitalization of the banks under the most pessimistic scenario, according to which the Spanish banks would need 100 billion Euros.

Last week downgraded Spain by three notches, from "A" to "BBB".

It bears mentioning that in the opinion of economist Joseph Stiglitz, Nobel prize winner, the financial aid for Spanish banks may not work, since it is "voodoo economics", where the Spanish state and the banks continue the vicious circle of supporting each other.

"The Spanish government saves the Spanish banks, and the Spanish banks save the Spanish government. It is voodoo economics. It won't work and it isn't working", said Stiglitz.

The single European currency yesterday gained against the dollar, due to Spain's bailout request, but in the second part of the day, the advance slowed down. At 10.30, on the New York market, the exchange rate for the Euro was 1.2533 dollars, up 0.1% over Friday.