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Statement by Olli Rehn about Spanish Banking Reforms

Brussels, 13 May 2012

Statement by Olli Rehn, Vice President of the European Commission responsible for Economic and Monetary Affairs and the Euro: I welcome the measures announced on Friday by the Spanish authorities to further reform the banking sector.

A prompt and profound reform of the banking sector is a cornerstone of Spain’s crisis response and its overall reform strategy. It is an indispensable supplement of the determined fiscal consolidation and front-loaded structural reforms that can bring sustainable growth and more and better jobs.

The current crisis in Europe is the result of a severe and intertwined combination of banking sector fragilities and sovereign debt crisis. This is particularly evident in Spain.

By deciding on these important measures for the banks, on top of those already announced in February, Spain is taking decisive action in addressing remaining vulnerabilities within the sector. The combination of increased provisioning against potential future losses, segregation of troubled assets, independent validation of balance sheets, and the availability of necessary public funds to support the overall reform effort is essential in order to reinforce investor confidence in Spanish banks.

The relevant Commission services will continue to cooperate closely with the Spanish authorities on the elements of the reform, as appropriate. In particular, measures implying state aid will have to be analysed and approved by the Commission.

These actions should dispel the lingering doubts about the stability of the Spanish banking sector.