The second review of the financial sector assistance programme for Spain carried out from 28 January to 1 February 2013 concluded that since the start of the last review, programme implementation has progressed, bolstered by developments in global capital markets and effective initiatives at a European level to tackle the sovereign debt crisis.

The European Commission in liaison with the European Central Bank, the European Stability Mechanism and the European Banking Authority, published the results of the second review of the financial sector assistance programme for Spain carried out from 28 January to 1 February 2013. The International Monetary Fund also participated in the review, fulfilling its role as an independent monitor.

Although the review outcome shows that persistent efforts are needed to overcome the significant challenges that face the weakest parts of the banking sector, warranting decisive policy action, as outlined in the Memorandum of Understanding, financial assistance programme implementation has progressed. Among other conclusions, the review highlighted that banking sector conditions have broadly stabilised since the outset of the programme, primarily as a result of several factors: the adoption of restructuring plans, the recapitalisation or imminent recapitalisation of the State-aided banks, the establishment of, and transfer of assets to, SAREB (the new asset management company), as well as the easing of funding constraints. In November 2012, the European Commission endorsed restructuring plans of the four Spanish State-owned banks.

The ECB also underlined that the economic situation in Spain remains challenging, with very high and rising unemployment, GDP contraction, and a need to reduce large stocks of internal and external debt. Notwithstanding the significant policy progress already made, further advances remain necessary in the consolidation of public finances - including reinforcing the institutional framework - and in the swift completion and implementation of the structural reform agenda, along the lines specified in last year's country-specific recommendations.