We have met today to discuss the situation in the euro area. We both agree that financial assistance to Spain for the recapitalization of its financial institutions, confirmed by the Eurogroup on July 20, is a key step to restore confidence in the Spanish financial system and to strengthen financial stability in the euro area. . The recapitalization of financial institutions, accompanied by an in-depth restructuring plan of the institutions concerned, will allow confidence to be restored and contribute to the smooth operation of the financing channels of the economy.
At the same time, the Spanish Government has launched deep reforms, in line with the recommendations of the European Council, in particular in the area of budgetary policy (including the level of the autonomous communities) and reforms of the labor market.
We consider that the current level of interest rates prevailing in the sovereign debt markets does not reflect the fundamentals of the Spanish economy, its growth potential and the sustainability of its public debt. The prompt implementation of this financial assistance program is essential to restore confidence and conditions for growth. We are fully confident that this will be an essential contribution to returning Spain to the path of sustainable growth.
We have also reaffirmed our commitment to fully and quickly implement the decisions taken at the European Council on June 28 and 29. Our common strategy for the stability of the euro area includes the adoption before the end of the year of a comprehensive supervision mechanism for banks in the euro area involving the ECB. We await the Commission's proposals between now and September and commit ourselves to swift negotiation. This supervisory mechanism will open the way to direct recapitalizations with appropriate conditionality.
We are equally and fully committed to the "Pact for Growth and Jobs", based in particular on better financing of the economy and innovation, through the EIB, project bonds and structural funds.
As a consequence of the June 28-29 European Council, we will also work on the design of a roadmap for a genuine economic and monetary union, which includes ambitious proposals to create conditions of solidarity as well as integration.
We will remain in close contact, as with the institutions of the European Union and our colleagues in the Eurogroup, and we will continue to monitor the evolution of the situation.