Spain’s Economy Minister Luis de Guindos has told parliament that the ownership of the “bad bank” being set up to absorb sour Spanish estate assets will be split 55- to-45 between private investors and the state.
De Guindos warned parliament on Wednesday that many of the assets hit since the collapse of Spain’s real estate market in 2008 had only “very conservative” residual value, but could eventually deliver a profit.
The asset management society, euphemistically called a “bad bank,” which was given the green light by Spain’s parliament in August, is due to begin operating in December. Its creation was part of a deal under which the EU would deliver bailout funds to Spain’s ailing banking sector.
Such eurozone capital injections would help troubled banks, said de Guindos, adding, however, that 70 percent had passed a stress test last week.
So far, Spain has said it would only need 40 billion euros out of up to 100 billion euros pledged by the eurozone for the Spanish banking sector.
Visiting Madrid on Wednesday, German Economics Minister, Philipp Rösler said Germany would not oppose a Spanish application, should Spain apply for a wider eurozone financial rescue involving bond-buying by the European Central Bank (ECB), according to the German news agency dpa.
“We are not slowing it down,” Rösler said, adding that Spain was held in “high esteem” in Germany.
Spainleaves option open
De Guindos replied that Spain had not decided on such a move. “The government would decide on the best possible option,” he said.
Spainand other troubled eurozone countries have an offer from the ECB that it would buy bonds from to help them keep their costs of borrowing in check.
In mid-September German Finance Minister Wolfgang Schäuble had warned eurozone colleagues at a ministerial meeting in Cyprus that Germany via its parliament was increasingly reluctant to contribute to more bailouts.
On Wednesday, the leader of Spain’s trade union confederation UGT, said he expected the Spanish government to seek the rescue shortly if Germany gave the green light, according to dpa.