Spain will exit a financial aid programme for its banking sector from January next year, without drawing more European funds.
The announcement came after an agreement by eurozone finance ministers in Brussels on Thursday.
Earlier this year, Spain borrowed €41 billion from an EU-IMF bailout package to rescue several inderet banks from the collapse of a property and construction bubble.
‘We also fully support Spain to cleanly exit the program. Thanks to the program, the Spanish banks are now stronger, more resilient, supervisory regulation has been tightened and this is confirmed by the positive market sentiment and the encouraging recent economic data from Spain. Structural reform agenda has advanced in parallel allowing a return to growth and a decrease in the macroeconomic imbalances. The Spanish authorities are determined to keep the reform momentum’, said Eurogroup’s head Jeroen Dijsselbloem.
Meanwhile, Ireland announced on Thursday it will also emerge from an EU bailout programme next month, being the first eurozone country to do so.
‘Ireland has made very impressive progress and is well placed to make a successful and durable exit from its program. While challenges remain, Ireland’s graduation fro the program will send a very clear signal to markets and to international lenders that the adjustment effort undertaken with the support of its European and international partners has paid off’, said EU Commissioner for Economic and Monetary Affairs Olli Rehn.
While Spain has fixed its damaged banks and has just emerged from its second recession in five years, it still faces huge economic challenges, including an unemployment rate of 25 percent.