The euro area’s conditions for providing emergency aid to Spain will focus on revamping the country’s banking industry, European Union Economy Commissioner Olli Rehn said.
“The policy conditionality will be concentrated on the restructuring of the banking sector,” Rehn told a European Parliament committee today in Strasbourg, France. He didn’t elaborate.
Spain two days ago became the fourth euro-area nation to seek a bailout since the start of the region’s debt crisis more than two years ago with a request for as much as 100 billion euros ($125 billion) to rescue its banks. Premier Mariano Rajoy, who as recently as May 28 said he wouldn’t seek a bailout, characterized the deal as a credit line for lenders.
The aid is due to come from either the temporary European Financial Stability Facility, which was created in 2010 for three years, or the planned permanent European Stability Mechanism, due to start operating in July.