Proposal for a Council Decision addressed to Spain on specific measures to reinforce financial stability

Spain has recently come under increasing pressure in financial markets. Market uncertainty has centred on the situation of the banking sector, which has been adversely affected by the burst of the real estate and construction bubble and the economic recession that followed. As a result, several Spanish banks have accumulated large stocks of problematic assets raising concerns about viability of some of these banks.

On 9 June 2012, the Eurogroup was informed about Spanish authorities' intention to apply for financial assistance to recapitalize its banking sector. The Eurogroup stated that it was willing to respond favourably to such a request and committed to granting Spain financial assistance, covering estimated capital requirements with an additional safety margin, estimated as summing up to €100 billion in total.

On 25 June 2012, the Spanish Government requested external financial assistance in the context of the ongoing restructuring and recapitalisation of the Spanish banking sector. A formal request was submitted following the publication on 21 June of the results of the first stage of the independent evaluation of the balance sheets of banks. The assistance is sought under the terms of the Financial Assistance for the Recapitalisation of Financial Institutions by the EFSF.

Following this request, the European Commission in liaison with the ECB, the European Banking Authority (EBA) and the IMF conducted an independent assessment of the eligibility of Spain's request for such assistance. This assessment concluded that Spain fulfils the eligibility conditions.

• Primary Source

EUR-Lex: COM(2012)406: Follow the progress of this document through the decision-making procedure http://eur-lex.europa.eu/legal-content/EN/HIS/?uri=COM:2012:406:FIN

---