Today's unanimous endorsement by the Eurogroup of the sectoral programme for Spain opens the way to the necessary recapitalisation and repair of the country's financial sector. The aim of this programme is very clear: to provide Spain with healthy, effectively regulated and rigorously supervised banks, capable of nurturing sustainable economic growth.
The Memorandum of Understanding approved today sets out the precise conditions under which public money will be made available for solvent banks that are unable to raise the capital they need through private means. Restructuring plans will have to comply fully with EU state aid rules, to ensure that the banks that emerge at the end of the process will be viable entities that will not need further public support. In parallel, the regulatory and supervisory framework in Spain will be significantly reinforced and consumer protection legislation strengthened.
The Memorandum also makes clear that Spain will be expected to maintain its commitments to correct its excessive deficit in a sustainable manner by 2014 and to adopt the structural reforms set out in the country-specific recommendations adopted by the Council on 10 July. The explicit link between these obligations and the sectoral programme is deliberate and pertinent. It is only through determined action across all of these fronts that Spain can create the financial stability and competitive, dynamic economy that will bring about a steady and lasting fall in unemployment.