Spain no longer needs the 30 billion euros ($38 billion) set aside for emergencies in the first months after its bank bailout was approved as it is now on track for scheduled payments, European Stability Mechanism head Klaus Regling said.
The ESM will take over the 30 billion euros in bonds that were created in July at the firewall fund’s predecessor, the European Financial Stability Facility, and never tapped by Spain, Regling told reporters in Brussels late yesterday. Going forward, Spain is on track to receive disbursements from its 100 billion-euro bailout in the course of its agreed rescue package, he said.
Spain is no longer considered to be at risk of needing of emergency funding, he said in an interview after a joint press conference with Luxembourg’s Jean-Claude Juncker and EU Economic and Monetary Affairs Commissioner Olli Rehn. The money that had been set aside for emergencies immediately after the bailout package was approved won’t disappear, Regling said. Instead, it will now be folded into the aid package as it proceeds.
The group of euro-area finance chiefs today welcomed Spain’s banking-sector progress and Juncker, who heads the group of ministers, said a final report on Spanish banks is due by the end of this month. Regling told reporters the ESM, which began operations last month, should be ready to make the first disbursement from Spain’s program in early December.
Spain also is in the process of showing the EU its planned fiscal consolidation measures for the next two years and is working hard to meet its targets, Rehn said to reporters after the press conference. Rehn said the commission will shortly present its proposals for Spain to EU nations.
“We will focus on the structural sustainability of public finances over the medium term,” Rehn said. “That means structural effort, not only the nominal target.”