Brussels, 08/07/2014 (Agence Europe) - On Monday 7 July, the European stability mechanism (ESM) approved an early payment of €1.3 billion of the total loan of €41.3 billion borrowed by Spain from the ESM to bail out Spanish banks.
This is the first time a eurozone country has repaid some of its financial aid early and is intended to send a clear signal at home and to investors that Spain is deleveraging and emerging from the financial crisis. The ESM director general, Klaus Regling, said the decision was taken by the Spanish government alone and did not commit them to anything in the future. He said the repayment sent a positive message that the restructuring of Spanish banks using aid from the ESM had been a success.
The €1.3 billion repayment comes from the sale of assets held by the Spanish state in the Bankia bank that was nationalised when the Spanish property boom collapsed. It will be used to reduce the payments still due on the aid package as a whole rather than any one part of it in particular.
From December 2012 to February 2013, the ESM lent Spain €41.3 billion and the Spanish government (which lent it on to Spanish banks) is liable for full repayment of the aid, scheduled for 2027. (MB)