Brussels, 17/07/2012 (Agence Europe) - At midday on Friday 20 July 2012, the eurozone finance ministers, in contact by videoconference, will conclude the details of the Spanish memorandum, said a spokesperson for the head of Eurogroup, Jean-Claude Juncker, adding that this would be the only subject discussed at the meeting. The Eurogroup has agreed to pay the first instalment of the aid, €30 billion, so that the country can bail out its banks.
The draft memorandum has been available online for the past few days. It sets out 32 conditions to be met by the Spanish government in return for aid of up to €100 billion.
Along with the transfer of powers from the Spanish economy ministry to the Bank of Spain (particularly the power to apply penalties), the memorandum gives the European Commission powers of surveillance, along with the European Central Bank and the European Banking Authority.
The document says that the cost to the taxpayer of bailing out the banks must be kept to a minimum and the Spanish government is asked to introduce measures to ensure that holders of junior debt agree to a write-down as their share of the financial burden. A law to this effect, to be amended if necessary to make the measures compulsory if the bond and shareholders refuse to comply voluntarily, is due to come into force at the end of August. The EU is imposing tight conditions on top of the medium-term austerity measures announced by Spanish prime minister Mariano Rajoy last week. Spain is planning to make savings of €65 billion in order to bring its public deficit back below the cut-off point of 3% of GDP by 2014.
The matter will be discussed by the Committee of Member States' Permanent Representatives (COREPER I) on Thursday 19 July, the day before eurozone finance ministers are due to agree the terms and conditions attached to the Spanish aid package, such as deadlines and interest rates.
The Greek and Cypriot memoranda will be discussed by the Eurogroup in September, announced Jean-Claude Juncker on 10 July (see EUROPE 10652). (EL/transl.fl)