Brussels, 29/01/2014 (Agence Europe) - On Wednesday 29 January, the European Commission published a positive assessment of the fifth monitoring mission by the troika (European Commission, European Central Bank and International Monetary Fund) in Spain during the aid programme to bail out Spanish banks.
The European Commission warns that banks and the Spanish authorities “need to be ready to take remedial action if required, should the ECB's test reveal a shortage of capital in some banks.' Spanish Finance Minister Luis De Guindos told the European Parliament on Tuesday 28 January that Spanish banks would sail through the ECB's asset quality review.
The Spanish bank bailout programme ended last week. It strengthened the banks' solvency following the collapse of the housing bubble. Growth returned to the Spanish economy in the third quarter of 2013 and public finances are being consolidated, despite rising public debt.
The Commission cautiously welcomed the progress in Spain, but it says: “Supervisors should continue monitoring the banks' sustained efforts to maintain and further reinforce capital ratios, which are also instrumental to support their capacity to lend to viable borrowers”. In addition, “the high budget deficit needs to be brought down so as to halt and reverse the ongoing rise in general government debt”. The Commission says Spain's high unemployment needs to be tackled by means of reform of the labour market, the civil service and the tax system. (EL/transl.fl)