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Summary

Spain successfully exited the financial assistance programme for the recapitalisation of financial institutions in January 2014. The programme had been agreed by the Eurogroup in July 2012 for a period of 18 months and provided an external financing by euro area countries of up to €100 billion.

Post-programme surveillance

Spain used around €38.9 billion for bank recapitalisation, under restructuring and resolution plans approved by the European Commission under state aid rules, and around €2.5 billion for capitalising Sareb (the Spanish asset management company). Both the bank-specific conditionality and the horizontal conditionality included in the memorandum of understanding (MoU) were fulfilled as scheduled

After exiting the programme, the monitoring of the Spanish economy and its financial sector continues in the context of the post-programme surveillance (PPS), outlined in Regulation (EU) N°472/2013.

PPS starts after the expiry of the programme and monitors of the repayment capacity of a country having received financial assistance. Country missions take place twice a year, along with published reports.

Key elements of the programme for Spain

The July 2012 MoU included both bank-specific conditionality, in line with State aid rules, and horizontal conditionality. Even though the financial assistance was provided for a period of 18 months, the restructuring of the banks receiving public support under the State aid rules is expected to take up to five years.

The bank-specific conditionality had 3 main components

  • a comprehensive diagnostic as regards the capital needs of individual banks, based on a comprehensive asset quality review and valuation process, as well as bank-by-bank stress tests.
  • the segregation of impaired assets from the balance sheet of banks receiving public support and their transfer to an external asset management company (Sareb)
  • the recapitalisation and restructuring of viable banks and an orderly resolution of non-viable banks, with private sector burden-sharing as a prerequisite

Horizontal conditionality applied to the entire banking sector and included measures aimed at

  • strengthening regulatory, supervisory and bank resolution frameworks
  • enhancing the governance structure of savings and commercial banks
  • improving consumer protection legislation as regards the sale by banks of subordinated debt instruments

The Commission ,ECB and the European Banking Authority (EBA), verified at quarterly intervals that the policy conditions attached to the financial assistance were fulfilled, through missions and regular reporting by the Spanish authorities. In addition, the IMF supported the implementation and monitoring of the programme with advice and regular reporting.

News articles and press releases

9/10/2018 Staff statement following the tenth post-programme mission to Spain

16/04/2018 Statement by the staff of the European Commission and the European Central Bank following the ninth post-programme surveillance visit to Spain

23/10/2017 Statement by the staff of the European Commission and the European Central Bank following the eight post-programme surveillance mission to Spain

28/04/2017 Statement by the staff of the European Commission and the European Central Bank following the seventh post-programme surveillance mission to Spain

24/10/2016: Statement by the staff of the European Commission and the European Central Bank following the sixth post-programme surveillance visit to Spain

18/04/2016: Press statement following the 5th post-programme surveillance visit to Spain

12/10/2015: Press statement following the 4th post-programme surveillance visit to Spain

23/03/2015: Press statement following the 3rd post-programme surveillance visit to Spain

13/10/2014: Statement by the European Commission and the European Central Bank following the 2nd post-programme surveillance mission to Spain

04/04/2014: Statement by the European Commission and the European Central Bank following the conclusion of the first post-programme surveillance mission to Spain

22/01/2014: Statement by Vice President Rehn on Spain

16/12/2013: Statement by the EC and the ECB following the conclusion of the 5th review of the financial assistance programme for Spain

14/11/2013: Statement by the Eurogroup

30/09/2013: Statement by the EC and the ECB following the conclusion of the 4th review of the financial assistance programme for Spain (MEMO/13/836)

15/07/2013: IMF 3rd Progress Report

10/07/2013: Commission publishes its 3rd review of the programme

03/06/2013: Statement by the EC and the ECB following the conclusion of the 3rd review of the financial assistance programme for Spain

14/05/2013: State aid: Commission clears new restructuring plan of Banco CEISS in view of its possible acquisition by Unicaja (IP/13/423)

04/02/2013: Statement by Vice President Rehn following the 2nd review mission of the Spanish financial sector programme (MEMO/13/59)

04/02/2013: Statement by the EC and the ECB following the conclusion of the 2nd review of the financial assistance programme for Spain (MEMO/13/58)

26/12/2012: The FROB implements the recapitalisation of all of the Group 1 banks

20/12/2012: State aid: Commission approves restructuring plans of Spanish banks Liberbank, Caja3, Banco Mare Nostrum and Banco CEISS (IP/12/1432)

03/12/2012: Ministerio de Economía y Competitividad: España solicita los fondos para la recapitalización bancaria

28/11/2012: State aid: Commission approves restructuring plans of Spanish banks BFA/Bankia, NCG Banco, Catalunya Banc and Banco de Valencia

26/10/2012: Statement by the EC and the ECB following the conclusion of the first review of the financial assistance programme for Spain

28/09/2012: Statement by the President of the Eurogroup Jean-Claude Juncker on Spain

28/09/2012: Oliver Wyman - Asset Quality review and Bottom-Up Stress Test Exercise

27/09/2012: Comments by Vice-President Olli Rehn on the publication of the Spanish Structural Reform Plan

17/09/2012: Roadmap for the banking recapitalisation and restructuring

12/09/2012: Increase of €6 billion in the endowment assigned to the FROB

03/09/2012: Decision on recapitalisation of BFA/Bankia Group. Update of the current situation of the restructuring processes for institutions under the control of the FROB

31/08/2012: Eurogroup statement on the publication of BFA-Bankia's balance sheet

31/08/2012: Statement by Vice-President Rehn on the adoption of Spain's banking decree (MEMO/12/637)

31/08/2012: Communiqué of the Fund for the Orderly Bank Restructuring (FROB) on the results of the BFA/Bankia Group for the first half of 2012

31/08/2012: Enactment of Royal Decree-law 24/2012, of August 31st, on restructuring and resolution of credit institutions

31/08/2012: (es) Real Decreto-ley 24/2012, de 31 de agosto, de reestructuración y resolución de entidades de crédito

28/08/2012: Press statement by the President of the European Council, Herman Van Rompuy, following his meeting with Mariano Rajoy President of the Government of Spain 

25/07/2012: Joint statement by Luis de Guindos, Minister of Economy and Competitiveness, and Pierre Moscovici, Minister of Economy and Finance

24/07/2012: Joint statement by Spanish Minister for Economic Affairs and Competition, Luis de Guindos, and German Finance Minister, Wolfgang Schaüble

23/07/2012: Spain - Memorandum of Understanding on Financial-Sector Policy Conditionality (MoU)(129 kB)

20/07/2012: Eurogroup grants financial assistance to Spain's banking sector

20/07/2012: Statement by the Eurogroup on financial assistance for the recapitalisation of financial institutions in Spain

20/07/2012: EFSF - Master Financial Assistance Facility Agreement between European Financial Stability Facility, Kingdom of Spain as beneficiary Member State, Fondo de Reestructuración Ordenada Bancaria as guarantor and the Bank of Spain (FFA)

20/07/2012: IMF - Terms of Reference for Fund Staff Monitoring in the Context of European Financial Assistance for Bank Recapitalisation in Spain (ToR)

20/07/2012: Statement by Vice President Rehn following the Eurogroup's agreement on the sectoral programme for Spain (MEMO/12/590)

10/07/2012: Eurogroup agrees on the programme for Spain

10/07/2012: Spain is given an extra year to correct its deficit

09/07/2012: Eurogroup statement on the follow-up of the 29 June Euro Summit

29/06/2012: Statement by President Barroso at the press conference following the European Council of the 28-29 June 2012 

29/06/2012: Statement by President Barroso at the end of the Euro area Summit 

29/06/2012: Conclusions of the European Council (28/29 June 2012)

29/06/2012: Euro Area Summit statement

27/06/2012: Statement by the Eurogroup

25/06/2012: Statement by Vice-President Olli Rehn on the request by Spain for financial assistance for recapitalisation of financial institutions (MEMO/12/486)

25/06/2012: Statement by the President of the Eurogroup on the formal application for financial assistance by the Spanish authorities

25/06/2012: Spain formally requests financial aid for Spanish banks

09/06/2012: Eurogroup statement on Spain

11/05/2011: Council Regulation (EU) No 407/2010 of 11 May 2010 establishing a European financial stabilisation mechanism (OJ L 118, 12.5.2010, p.1).

Reports

Post-Programme Surveillance Report – Spain, Spring 2015 (Occasional paper 211, May 2015)

Post Programme Surveillance - Autumn 2014 Report (Occasional papers 206, December 2014)

Post Programme Surveillance – Spring 2014 Report (Occasional papers 193, May 2014)

Financial Assistance Programme for the Recapitalisation of Financial Institutions in Spain. 5th review – Winter 2014 (Occasional papers 170, January 2014)

The Spanish financial-sector programme over 2012-13 - Key features and achievements (Presentation, January 2014)

Financial Assistance Programme for the Recapitalisation of Financial Institutions in Spain. 4th review – Autumn 2013 (Occasional papers 163, November 2013)

Financial Assistance Programme for the Recapitalisation of Financial Institutions in Spain. 3rd review of the programme – Summer 2013 (Occasional papers 155, July 2013)

Financial Assistance Programme for the Recapitalisation of Financial Institutions in Spain. 2nd review of the programme – Spring 2013 (Occasional papers 130, March 2013)

Financial Assistance Programme for the Recapitalisation of Financial Institutions in Spain. Update on Spain's compliance with the Programme - Winter 2013 (Occasional papers 126, January 2013)

Financial Assistance Programme for the Recapitalisation of Financial Institutions in Spain. First review - Autumn 2012 (Occasional papers 121, November 2012)

The Financial Sector Adjustment Programme for Spain (Occasional papers 118, October 2012)

Related publications

International Capital Flows and the Boom-Bust Cycle in Spain (Economic papers 519, June 2014)

Assessing the impact of a revenue-neutral tax shift away from labour income in Spain (Country Focus, April 2014)

IDR Macroeconomic imbalances - Spain 2014 (Occasional papers 176, March 2014)

Spanish housing market: adjustment and implications (Country Focus, December 2013)

Macroeconomic Imbalances (Occasional papers 134, March 2013)

Macroeconomic Imbalances (Occasional papers 103, July 2012)