MADRID — Spanish banks, not taxpayers, must pay for any future costs of recapitalising the financial sector so as to avoid deepening the public deficit, Finance Minister Elena Salgado said on Thursday.
Thursday, 6 October 2011
The reform announced by minister had a clear messsage: banks must now stand on their own feet, six days after the state sealed a 7.55-billion-euro ($10.2 billion) overhaul of the financial sector.
"The government's intention is that future losses that may occur in the recapitalisation of the financial sector should not be transferred to the taxpayer nor increase the public deficit," she told a news conference.
The Spanish government will not budge from its vow to slash the public deficit from the equivalent of 9.2 percent of gross domestic product last year to 6.0 percent of GDP this year, Salgado said.
Spain has promised to further reduce its public deficit to 3.0 percent of GDP -- the European Union-agreed ceiling -- in 2013
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