DEBT CRISIS

Spain and Italy to Be Bailed Out

In $950 billion deal.

At this point, who hasn’t accepted a bailout? German Chancellor Angela Merkel and other European leaders reportedly agreed late Tuesday to allow two European rescue funds to buy back the troubled bonds in Spain and Italy in a $950 billion deal. The funds had previously been used to bail out smaller economies such as Portugal and Greece, and it is the first time bailout funds have been directly used for Spanish debt. It represents a sharp policy shift for Merkel, who had long opposed the euro zone’s rescue fund, but the chancellor has come under intense pressure at the G20 economic forum in Los Cabos, Mexico, and as Spain’s borrowing costs soared on Tuesday.