EU approves restructuring plans of four Spanish banks

BRUSSELS, Nov. 28 (Xinhua) -- The European Commission on Wednesday approved restructuring plans for four Spanish banks, namely BFA/Bankia, NCG Banco, Catalunya Banc and Banco de Valencia.

The four Spanish lenders will need 37 billion euros (about 48 billion U.S. dollars) to be recapitalized and the banks' bondholders will face losses, European Union (EU) Competition Commissioner Joaquin Almunia said at a press conference.

The Commission has concluded that the restructuring plans are in line with EU state aid rules.

"What we've approved today means that the funds for the European Stability Mechanism can be disbursed," Almunia told reporters.

Spain was given approval to receive up to 100 billion euros from the European Stability Mechanism (ESM) in June. Almunia hailed Wednesday's move as "a milestone in the implementation of the Memorandum of Understanding between euro area countries and Spain."

"Our objective is to restore the viability of banks receiving aid so that they are able to function without public support in the future," Almunia said, adding that a healthier financial sector is "indispensable" for economic recovery in Spain.

"We also make sure that banks use no more than what is necessary of taxpayers' money to restructure and do not go back to unsustainable business practices," he said.

Recommended Features: Vibrant Opportunities amid Transition From 'Made in China' to 'Created in China' A Journey to Cultural Renaissance The Vision of A Pillar Industry China: A Fast-growing Force in IPR IPR in China: Local Roots Bearing Global Fruits A Decade of Fastest Development Eastern Boom Lightens Western Gloom Chinese firms 'potential Trojan horses'？