Bailing out Spain’s banking sector will not mean a better deal for Ireland on its debts, Minister for Finance Michael Noonan said.
Last night, the Eurogroup of euro zone finance ministers agreed to a Spanish request for an aid package for its banks worth up to €100 billion.
Mr Noonan, who took part in yesterday’s teleconference of ministers said the agreement to bail out Madrid is a “collective response” by euro zone member states to help resolve the difficulties in the Spanish banks.
“This announcement will provide much needed confidence and stability in the euro zone and this will be particularly important for Ireland’s economy as the eurozone crisis has weighed on our economic growth over the past year,” he said last night.
Mr Noona said the European authorities will provide up to €100 billion to fully recapitalise the Spanish banks and to provide a significant safety margin beyond the recapitalisation requirements.
The funds will be provided through the EFSF-ESM at the same interest rates which apply to funds provided to other programme countries.
“The Spanish programme of assistance is providing funds for the financial sector and as such the conditionality of the programme will apply to this sector,” Mr Noonan said. “Similar to existing programmes of assistance the European funds provided to Spain will be the responsibility of the Spanish sovereign.”