The Spanish government today approved a contribution of 9.8 billion euros (12.4 billion dollars) to an EU- International Monetary Fund bailout of the debt-stricken Greek government, saying Spain was economically solid enough to help Greece, according to dpa. However, the Ibex 35 index of the Madrid stock exchange plunged by more than 4 per cent Friday to its lowest level since May 2009, while shares also tumbled in other European capitals. The loan to Greece will be paid out over three years, with a maximum of 3.7 billion euros to be released this year, Deputy Prime Minister Maria Teresa Fernandez de la Vega said. The aid package will have no impact on Spain's public deficit, Economy Minister Elena Salgado said. Analysts have expressed concern over Spain's deficit, which stands at 11.2 per cent of gross domestic product (GDP). The Spanish contribution to the Greek bailout will be the eurozone's fourth-largest after money to be provided by Germany, France and Italy. Parliament was deemed certain to approve the aid package after the conservative opposition People's Party (PP) gave its backing to it. But there has been some criticism of the help given to Greece despite concern that Spain itself could be heading towards a Greek- style financial meltdown. Vega said Spain's economy was solid enough for Madrid to help Athens, referring to data released by the Bank of Spain earlier in the day. The central bank said Spain rose out of recession in the first quarter, growing by 0.1 per cent after six quarters of decline. In the fourth quarter of 2009, gross domestic product had shrunk by 0.1 per cent. However, the economy was still down by 1.3 per cent year-on-year, the Spanish central bank said. The economy contracted by 3.6 per cent in 2009. Households were now consuming more, although the overall consumption level remained weak, according to the bank bulletin. Investments were also slow due to concern over the future of the Spanish economy and difficulties in obtaining credit, the central bank said. The figures issued by the Bank of Spain need to be confirmed by the statistics body INE, which gives the official figures. Spain's jobless rate showed signs of a slight recovery in April, after exceeding 20 per cent in the first quarter.
