German Finance Minister Wolfgang Schaeuble, after conceding an interview to Spanish newspaper El Pais, said the country's troubled banking industry has specific issues and recapitalization should be provided via the European stabilization fund, known as EFSF, when the time is right.
The head of German fiances also warned Europe will be unable to set up a banking supervisor this year, against expectations calling for the authority to be put in place as early as December. The banking supervisor board, which will be overseen by the ECB, was agreed in the last EU summit as a way to tighten up control over aid sent directly to Spanish banks.
The appropriate interpretation of the funds destined to recap Spanish banks was classified by Schaeuble as loans and not donations, a sum that would count towards Spanish debt despite the more flexible terms, Schaeuble told the newspaper.
He also said: "To talk of what will happen when the future banking supervisor is functioning is to build castles in the sky. Right now we must work with what we have," adding that "the fundamental figures and the intention to reduce the deficit shows that we should not exaggerate on the bailout cost. Spain is on the right path."
New Greek government wins vote of confidence
Greek coalition government has won vote of confidence in Parliament. Greece’s PM Samaras tells reporters plans to accelarate privatizations and bring forward much needed reforms to try stall the slowdown of the economy.
Amongst the comments, PM said "state assets can spur growth and investment to the country." The win was almost a done deal as Samaras's three-party coalition government enjoys a 179 seats majority in the 300-seat parliament.