FRANKFURT (MNI) – The following is the verbatim statement issued by
the Eurogroup, welcoming Spain’s request from other Eurozone member
states:
Ministers welcome the request of the Spanish Government for
financial assistance from euro-area Member States. Ministers welcome the
assessment provided by the Commission, in liaison with the ECB, EBA and
the IMF, that the eligibility conditions for access to an EFSF/ESM
financial assistance for the re-capitalisation of financial institutions
are satisfied. In line with this, Ministers consider that providing
assistance to Spain is warranted to safeguard financial stability in the
euro area.
The financial assistance could be provided by the EFSF until the
ESM becomes available, then it would be transferred to the ESM. The
results of the diagnostic exercise, commissioned by the Spanish
authorities to external evaluators, indicate that the additional capital
needs of the Spanish banking sector as a whole can be currently
estimated to be in a range of EUR 51-62 billion. Including an additional
safety margin and subject to the forthcoming assessment by the European
Commission in liaison with ECB, EBA, and IMF, these capital needs would
remain well within the envelope defined by the Eurogroup of up to EUR
100 billion in total.
As required by current EFSF/ESM procedures, the specific amount
will be finally determined based on a thorough bottom-up assessment of
individual financial institutions, which has already been launched. The
Commission, in liaison with the ECB, EBA and the IMF, will also provide
a proposal for the necessary policy conditionality for the financial
sector that shall accompany the financial assistance. This will include
specific reforms targeting the financial sector, including restructuring
plans in line with EU State-aid rules and horizontal structural reforms
of the domestic financial sector. After an agreement has been reached
with the Spanish’ authorities, the financial assistance would be
endorsed by the Eurogroup, in line with national procedures.
The Fund for Orderly Bank Restructuring (FROB), acting as an agent
of the Spanish government, would receive the funds and channel them to
the financial institutions concerned. The Spanish government will remain
fully liable and will sign the Memorandum of Understanding and the
Financial Assistance Facility Agreement.
The Eurogroup reiterates its confidence that Spain will honour its
commitments under the Excessive Deficit Procedure, and with regard to
structural reforms, with a view to correcting any macroeconomic
imbalances as identified within the framework of the European semester.
Progress in these areas will be closely and regularly reviewed in
parallel with the financial assistance.
Spain will request technical assistance from the IMF, which will
support the implementation and monitoring of the financial assistance
with regular reporting.
[TOPICS: MT$$$$,M$$CR$,M$S$$$,M$$EC$,MI$$$$]