Saturday

23rd Mar 2019

Spain to get bank bailout next week

  • Stricken Bankia will get an 18 billion bank bailout. (Photo: rahego)

Eurozone finance ministers agreed Monday (3 December) that €39.5 billion will be paid to prop up Spain's banks.

Speaking with reporters after the meeting, Jean Claude Juncker, who chairs the 17 member Eurogroup, stated that Spain had taken steps to fulfil its terms of the bailout.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

"The implementation of the program is well on track, meeting all required conditionality steps as enshrined in the memorandum of understanding," he said.

"We have also welcomed the decision by the ESM (European Stability Mechanism) board of directors to authorise the first tranche of the programme of up to 39.5 billion (euros). The disbursements will be made in mid next week," Juncker said.

The four nationalised Spanish banks will receive €36.97 billion in European aid. Of this, €17.96 billion - will go to Bankia, which holds 10 percent of Spanish savings deposits, while €5.43 billion will be disbursed to Novagalicia, €9.08 billion to CatalunyaCaixa and €4.5 billion to Banco de Valencia.

A further €2.5 billion will be paid into Spain's state-backed "bad bank," set up to bear losses, estimated at up to €60 billion, following the collapse of the country's property market.

The loans have a 12.5 year maturity meaning a repayment date of 2025, with Spain obtaining an interest rate averaging at less than 1 percent.

Spain's finance minister, Luis De Guindos, welcomed the deal. "We believe these are advantageous conditions, that will help heal, restructure and overcome the problems in the Spanish banking system. It's positive, it's fundamental, it's vital and we won't make the mistakes of the past," he said.

Portugal also received assurances that it would receive €2.5 billion in January as part of its bailout deal."Provided the authorities persevere with strict programme implementation, we reaffirmed our commitment to support Portugal until full market access is regained.

"Following the conclusion of this review, which we expect shortly, Portugal will receive 2.5 billion (euros) in January -- 2.5 billion that means 1.6 billion from EFSF/ESM and 0.9 billion from the IMF.

Juncker indicated that eurogroup talks on emergency funding for Cyprus would continue on 13 December.

Meanwhile, speaking after the meeting Juncker revealed that he would stand down as the eurogroup chairman at the end of the month. Juncker, who serves as both the Prime Minister and Finance minister of Luxembourg, has held the post since 2005.

Germany's Wolfgang Schaueble and France's Pierre Moscovici are already being touted as the front-runners for the job, although the Germans, through Klaus Regling, who was appointed as director of the ESM, have a senior EU finance post.

While Juncker has previously indicated support for Schaueble, he refused to be drawn on the matter. "I don't have to endorse anyone, I asked my colleagues to provide for my successor," he said.

ESM bank bailouts will not happen soon, says Schaeuble

German finance minister Wolfgang Schaeuble Monday reiterated that no bank recapitalisation could take place until the EU's planned banking union is up and running but admitted "Spain can't wait that long".

Merkel backs Spain's embattled PM

Germany's Merkel has "full confidence" in Spanish leader Mariano Rajoy, accused of having received secret payments together with other party officials.

News in Brief

  1. EU leaders at summit demand more effort on disinformation
  2. Report: Corbyn to meet May on Monday for Brexit talks
  3. Petition against Brexit attracts 2.4m signatures
  4. Study: Brexit to cost EU citizens up to €40bn annually
  5. NGOs demand France halt Saudi arm sales
  6. Report: Germany against EU net-zero emissions target
  7. Former top EU official takes job at law firm
  8. Draft text of EU summit has Brexit extension until 22 May

Agenda

Copyright and (another) new Brexit vote This WEEK

The UK parliament will likely hold a third vote on the Brexit withdrawal deal next week, determining the UK's departure from the bloc. In the meantime, the controversial copyright reform will be on the EU parliament's agenda.

Magazine

All about the European Parliament elections 2019

EUobserver's new magazine is meant to help readers prepare for the European Parliament elections, no matter their level of knowledge. You can download and read the entire magazine now.

Stakeholders' Highlights

  1. Nordic Council of MinistersNew campaign: spot, capture and share Traces of North
  2. Nordic Council of MinistersLeading Nordic candidates go head-to-head in EU election debate
  3. Nordic Council of MinistersNew Secretary General: Nordic co-operation must benefit everybody
  4. Platform for Peace and JusticeMEP Kati Piri: “Our red line on Turkey has been crossed”
  5. UNICEF2018 deadliest year yet for children in Syria as war enters 9th year
  6. Nordic Council of MinistersNordic commitment to driving global gender equality
  7. International Partnership for Human RightsMeet your defender: Rasul Jafarov leading human rights defender from Azerbaijan
  8. UNICEFUNICEF Hosts MEPs in Jordan Ahead of Brussels Conference on the Future of Syria
  9. Nordic Council of MinistersNordic talks on parental leave at the UN
  10. International Partnership for Human RightsTrial of Chechen prisoner of conscience and human rights activist Oyub Titiev continues.
  11. Nordic Council of MinistersNordic food policy inspires India to be a sustainable superpower
  12. Nordic Council of MinistersMilestone for Nordic-Baltic e-ID

Latest News

  1. Italy takes China's new Silk Road to the heart of Europe
  2. What EU leaders agreed on climate - and what they mean
  3. Copyright and (another) new Brexit vote This WEEK
  4. EU avoids Brexit crash, sets new date for 12 April
  5. Campaigning commissioners blur the lines
  6. Slovakia puts squeeze on free press ahead of election
  7. EPP suspends Orban's Fidesz party
  8. Macron is confusing rigidity with strength

Join EUobserver

Support quality EU news

Join us