Brussels, 25 June 2012
Statement by Vice-President Olli Rehn on the request by Spain for financial assistance for recapitalisation of financial institutions
I welcome the formal request of the Spanish authorities to the Eurogroup for financial assistance for recapitalisation of financial institutions. Following this request, I have instructed our staff to step up their work to provide a clear assessment of the sector and its needs, as well as a proposal for the necessary policy conditionality that shall accompany the assistance, in liaison with the staff of the ECB, EBA and the IMF. The capital requirements recently estimated by two private firms provide a good starting point for this work. I am confident that we can conclude an agreement on the Memorandum of Understanding in a matter of weeks, so that we can proceed with the restructuring effort.
Restructuring the banking sector is key to reinforce the confidence in the Spanish economy and to restore the conditions to proper access to credit by companies and households, thus for sustaining the recovery.
The policy conditionality of the financial assistance, in the form of an EFSF/ESM loan, will be focused on specific reforms targeting the financial sector, including restructuring plans which must fully comply with EU state-aid rules. Conditionality will apply to banks being recapitalised and to the Spanish financial sector as a whole, including its supervision and regulatory requirements.
Furthermore, I expect Spain to keep the same determination and the momentum in the reforms that can bring sustainable growth and more and better jobs, as well as to honour its commitments under the excessive deficit procedure. Indeed there cannot be sustainable growth without sustainable public finances, both at national and subnational levels. Progress in these areas will be closely and regularly reviewed in parallel to the financial assistance.