By Nick Mann | 26 July 2012

Spain and France have called for the bailout of the Spanish banking sector to be finalised urgently to restore confidence in the financial stability of both Spain and the eurozone.

In a statement issued yesterday, Luis de Guindos, Spain’s minister of economy and competitiveness, and Pierre Moscovici, France’s minister of economy and finance, said the ‘swift implementation’ of the package was ‘essential to restore confidence and recreate conditions for growth’.

‘We are fully confident that they will help Spain achieve a sustainable growth path,’ they added.

The bailout package was agreed in June and rubberstamped by eurozone finance ministers on Friday. It would make up to €100bn available to Spain’s ailing banks.

Guindos and Moscovici said the bailout package was ‘a key step to restore confidence in the financial system in Spain and strengthen the financial stability of the euro area as a whole. 

‘The recapitalisation of financial institutions, along with the implementation of in-depth bank restructuring plans, will restore trust and provide for a sound functioning of the financing channels of the economy.’

Spain had already implemented reviews recommended by the European Council, particularly in relation to fiscal policy and the labour market, they added.

The ministers also called for progress in implementing last month’s Council decision to allow the bailout funds to be made directly available to Spain’s banks rather than through the country’s government.

‘Our common strategy for the stability of the euro area includes the adoption, by the end of this year, of a single supervisory mechanism for banks of the euro area, involving the European Central Bank. We expect proposals by the Commission by September and commit to a swift negotiation,’ they said.

‘This supervisory mechanism will open the way for direct recapitalisations with appropriate conditionality.’