The 'direct' use of the Eurozone's State-saving Fund (EFSF) for the recapitalization of banks in crisis, such as the Spanish Bankia, “is one of the elements being discussed” in the intense dialogue between national governments and the European institutions in view of the decisive European Council of 28 and 29 June. This was stated today in Brussels by the Minister for European Affairs, Enzo Moavero Milanesi, in his reply to reporters on the sidelines of a hearing of the European Economic and Social Committee on "The sovereign debt crisis".
"There is a legal issue that is being evaluated, it is one of the most important tools that can be activated", added Moavero. The ongoing debate, referring to the specific Spanish case, concerns the interpretation of the EFSF guidelines regarding loans to banksi.e. whether Madrid can ask for a loan limited to the recapitalization of Bankia, with conditions relating only to the banking sector, or whether it is obliged, in order to obtain the capital injection, to present a real request for financial aid to the Fund States, with a program of budget consolidation and structural reforms under the control of the Troika (European Commission-ECB-IMF), according to the path already followed by Ireland, Portugal and Greece, which however Spain has no intention of following.
The EFSF guidelines are very clear that the loan must be given to the state and not to a private entity, but this problem could be 'worked around' with the passage of the financing through a public fund, which would act as an intermediary. A fund that seems to meet these requirements (the Frob Fund for Orderly Banking Restructuring) has already existed in Spain since 2009.
