Spain exits eurozone bank support programme
Brussels: The eurozone aid programme for struggling Spanish banks closed as scheduled on Tuesday after providing some 41 billion euros ($55 billion) to get them through the debt crisis.
The support “has proven instrumental in recapitalising and restructuring Spain's troubled banks, which are today on a sound footing,” said Klaus Regling, head of the European Stability Mechanism, the fund set up to help eurozone countries at the height of the crisis.
“Spain's programme exit after one year is an impressive success story,” Regling said in an ESM statement.
In early 2012, it looked almost certain that Spain, crippled by banks over-exposed to a collapsed property market, would need a full international bailout as was the case for Greece, Ireland and Portugal earlier.
Madrid, however, refused to go down that path and instead managed to negotiate a deal with its eurozone partners worth up to 100 billion euros ($137 billion) in direct aid to fix the banks.
The ESM in the event needed only to pay out 41.3 billion euros as the Spanish economy, the fourth largest in the eurozone, stabilised despite massive problems and soaring unemployment.
The Spanish “government's determined reform efforts and the people's readiness to accept temporary hardship for the sake of a sustainable recovery are exemplary,” Regling said.
“The Spanish success shows that our strategy of providing temporary loans against strong conditionality is working.”
If their situation has improved, Spain's banks remain under great pressure, with figures earlier this month showing bad loan levels running at their highest in 50 years.