Brussels and the ECB ask Spain to complete the privatization of Bankia
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The European Commission and the European Central Bank (ECB) have again urged the Spanish authorities on Tuesday complete the sale of Bankia, as well as to encourage the divestment of bank foundations in savings banks, with the aim of "reinforcing" the Spanish banking system even more.
"Completing the privatization of Bankia and encouraging greater divestment of bank foundations in savings banks will continue to strengthen the Spanish banking sector," the EC Executive and the ECB said in preliminary form after the tenth visit to Spain after the bank rescue, that took place on the 4th and 5th of October.
At a general level, both institutions highlight that the Spanish banking sector "continues to enjoy a Solvency and comfortable liquidity», As well as that« its profitability has also improved thanks to the reduction of provisions related to doubtful loans ». In this sense, Brussels and the ECB have highlighted that the level of these toxic assets has decreased in Spain to be below the European average.
In relation to economic developments, Brussels and the ECB stress that growth continues to exceed the eurozone average and that the "rebalancing" of macroeconomic indicators has also progressed.
However, they have also indicated that the "weak" results of the foreign sector in the first half of the year have led to a "soft deceleration" of GDP growth, "in line" with expectations.
"In addition, the still high levels of external and domestic debt and unemployment justify political efforts to ensure a path of more lasting growth and to achieve greater growth in productivity," they add. In this regard, they recall that the measures should include «Steps» to continue reducing unemployment, make the labor market more inclusive, improve the business environment and strengthen the innovation capacity of the economy.
Finally, the preliminary declaration ends with the statement that Spain must continue with its fiscal consolidation "with a view to ensuring a decisive reduction of its public debt ratio" and to "build fiscal reserves necessary to overcome any possible adverse shock".
