BRUSSELS: Spain decided Thursday to follow Ireland's lead and exit its bank bailout without seeking a precautionary credit line in reserve, eurozone finance ministers said.
"We are fully supportive of Spain's decision not to request any successor ESM financial assistance following the programme exit in January 2014," said a statement following Brussels talks.
Spain agreed a 40-billion-euro rescue package for its banks with eurozone partners in July 2012, but faced the same difficulty as Ireland in deciding whether or not to request fallback assistance from the European Stability Mechanism, a rescue fund set up to provide a safety net for heavily-indebted governments.
The conditions under which taxpayer monies -- which lie at the root of the ESM -- can be pumped into private banks is a key issue being debated by finance ministers again on Friday.
While applauding the decision for the signal, like Ireland, sent to markets and other bailed-out countries, the Eurogroup said Madrid still had work to do.
"We call on the Spanish authorities to rigorously continue the reform momentum to address any remaining challenges regarding the economic and fiscal situation, including the high unemployment rate and the vulnerabilities stemming from the still high private and external debt."
EU Economy and Euro Commissioner Olli Rehn told a press conference after the talks that the Spanish financial market had stabilised, liquidity of banks had improved and deposits were rising.
He said the key now lay in the restructuring of Spain's local savings banks.
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