IMF report said that the 41.3 billion euro lifeline aid offered by the European Union had helped the banks of Spain become strong. After its third visit to Madrid, IMF said that the implementation of the financial sector program remains on track.
The report was submitted by a committee, which was appointed to check the compliance of Spain towards the imposed conditions in July 2012. The committee consisted of Washington based IMF, European Union and European Central Bank. It also welcomed the move of creating a bad bank, Sareb, which is used to buy bad assets from banks and sell them at profits.
The report underlined that the actions undertaken to recapitalise the banking sector parts and transfer of assets to Sareb, had offered much required boost to the system’s solvency and liquidity. However, proper steps have to be taken to further reduce the instability of the economy.
The report said that the risks that have risen from the hard economic environment are prevalent in the present conditions. It also advised to undertake continuous action towards safeguarding gains from the programme and useful support to the recovery of the economy. As per the report, the main concerns of European economy are high private debt, deficit of budget and decreasing prices in real estate.