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Eurozone approves early repayment of Spanish bank bailout funds

July 7, 2014

Brussels, Jul 7 (EFE).- The partners in the eurozone on Monday approved the early repayment by Spain of 1.3 billion euros ($1.77 billion) of the financial rescue package granted to Madrid in 2012, a sum that totaled 41.33 billion euros ($56.2 billion) and was aimed at helping to stabilize its financial system.

The board of directors of the European Stability Mechanism, or ESM, the eurozone's so-called rescue fund, backed the payment of this first amount, which Spain had formally requested to pay on June 27.

A payment was not due on the rescue package until 2022.

"The European Stability Mechanism Administrative Council today approved the voluntary request on the part of Spain to make an early payment of 1.3 billion (euros) of the loan to recapitalize the Spanish banking sector," the ESM said in a statement.

"This is the first time that a country in the eurozone, which benefited from a financial assistance program, has asked to make a payment before it was scheduled," the ESM said.

Spain said on June 6 that it would begin returning 1.3 billion euros ($1.77 billion) of the financial aid of up to 100 billion euros ($136 billion) it received in 2012 from its European partners. Ultimately, Madrid availed itself of 41.33 billion euros ($56.2 billion) of that amount.

The measure had to be approved by the countries of the eurozone through the ESM board of directors, which is comprised of the deputy officials at the countries' finance ministries. In the case of Spain, the general secretary of the Treasury is IÑigo Fernandez de Mesa.

The ESM maintains a program to supervise the countries that have received financial aid until they have returned all of that funding, and in Spain's case that was not scheduled to take place until 2027, the fund said.

The European Stability Mechanism is the permanent crisis resolution mechanism for the countries of the euro area. The ESM issues debt instruments in order to finance loans and other forms of financial assistance to eurozone member states. EFE


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Source: EFE Ingles

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