Eurozone leaders agreed at a summit dragging into
Friday morning to change the terms of an upcoming Spanish bank rescue
and allow countries like Italy to tap into eurozone funds to reduce its
borrowing costs, European Union President Herman Van Rompuy said.
Spain will be allowed to channel eurozone loans directly to stricken
lenders to avoid adding to its public debt load, but only after “an
effective single supervision mechanism is established” for the European
banking sector, he said.
Until then, existing rules
will apply, meaning that the Spanish government will be the intermediary
for the loans and remain liable for them.
Madrid
also won acceptance for its request that its eurozone creditors should
not enjoy preferential treatment over private investors, which it feared
could have deterred private investment.
In
reference to Italy, financial stability instruments to reduce borrowing
costs should be made available “already this summer” for countries that
are complying with EU policy prescriptions on deficits and economic
reforms, top eurozone official Thomas Wieser added.
DPA
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