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Spain formally requests financial aid for Spanish banks

Monday 25 June 2012

The full text of the letter is as follows:

"I am writing to you in the name of the Government of Spain to formally request financial assistance for the recapitalisation of the Spanish financial institutions that require it. This financial assistance is part of the terms of financial aid for recapitalising financial institutions. The specific choice of instrument used for this aid will take into account the different possibilities currently available and those that may be decided on in the future.

The Government of Spain takes a very positive view of the statement made by the Eurogroup ministers on 9 June backing the determination of the Spanish authorities to restructure the financial system and its intention of requesting financial assistance to recapitalise the financial institutions for an amount that is sufficient to cover capital requirements, plus an additional safety margin, up to a maximum of one hundred billion euros.

The Fund for Orderly Bank Restructuring (FROB), acting on behalf of the Government of Spain, will be the institution receiving the funds to be channelled to the financial institutions.

The Spanish authorities will offer their full support in evaluating the eligibility criteria, defining financial conditionality, following up on measures to be implemented, and the definition of the financial aid contracts, with the goal of finalising the "memorandum of understanding" before 9 July, so it can be discussed at the next Eurogroup meeting. The two audits of the Spanish financial system that have just been carried out by two independent experts, as well as the International Monetary Fund's FSAP analysis, should also be considered as a starting point."