The Eurogroup says the rescue is on track and asks the government to continue with the reforms
The eurozone economy ministers have said Monday that the bank rescue for Spain is “on the right track” and have left for the autumn the debate on the end of the program, although they have asked the Government of Mariano Rajoy to keep the pace of the reforms .
“We have celebrated that the program keeps going on the right track”, said the president of the Eurogroup, Jeroen Dijsselbloem, at the end of the meeting. ” Spain has complied so far the conditions of the program and respected all deadlines,” he stressed. “We have invited the Spanish authorities to maintain the reformist impulse”, explained Dijsselbloem. “We have not discussed the end of the program or what happens next, the next revision is in September, so that may be a good time to look forward,” he said.
The vice president of the Commission and responsible for Economic Affairs, Olli Rehn, has insisted that the Spanish bank rescue “is on the right track” and “has already helped to improve the situation of the banking sector.” “The Spanish banking sector is recovering health and resistance It is very important for Spain’s economic recovery that the banking sector reform program be successful and that the repair of the banking sector be completed soon,” said Rehn.
In his opinion, the success of the bank rescue “is a necessary condition for credit to flow to businesses and households .” “I have stressed the importance of the effective application of the program in all its aspects to ensure financial stability and recovery in Spain,” said the vice president.
The Eurogroup has discussed the results of the third evaluation report on the Spanish bailout prepared by the Troika inspectors who visited Madrid at the end of May. The report calls on the Spanish government to maintain a reinforced surveillance over the financial sector considering that risks still persist due to the bad economic situation and the fall of the real estate sector. The final text will be published this Wednesday.
The Minister of Economy, Luis de Guindos, has celebrated that the report of the troika certifies that all the conditions have been fulfilled and that ” the Spanish banking sector does not need more capital “. However, Guindos has avoided pronouncing on the exit options when the program ends. “It expires at the beginning of the month of January, at the beginning of next year, and there it expires, there it finishes”, it has limited itself to indicate to the being asked if Spain will be freed then of the supervision of the troika.
Draghi sees the recovery towards the end of the year
The president of the European Central Bank (ECB), Mario Draghi, has said that he sees the economic recovery in the European Union at the end of this year and 2014 thanks, among other measures, to the monetary policies adopted and the improvement in the financial markets.
Draghi has launched this message in his appearance before the Economic Affairs Committee of the European Parliament, in which he acknowledged that ” fundamental challenges ” still persist and that the state of the economy “remains weak”.
The ECB president has also said that in the last quarters the European economy has contracted and that labor market conditions “are still weak”, but noted that confidence indicators “show some improvements”. “In general, the activity of the European economic area should stabilize and recover throughout the year, albeit at a slow pace,” he said.
Among the pending challenges , he has cited “an economic fragmentation that challenges the single market” and in that sense, “the difficulties that SMEs face in accessing credit, especially in countries with difficulties”. “In Spain, for example, the interest rate for small loans is almost 2.3 percentage points higher than that of loans for large companies, while in France the difference is 1%,” he said.