We agree that the program to strengthen the Spanish banking sector is an important element in overcoming the crisis of confidence in Spain and in the euro area as a whole. The German Government as well as a very large majority of its Parliament support this program, which will help break the vicious circle between the banking and sovereign debt crisis. Now, the decisive and rapid full implementation of the roadmap included in that program is essential to restore confidence in the Spanish banking sector.
The Spanish Government has taken important steps to put the economy back on track. These measures are vital for the Spanish economy to achieve sustainable growth and regain competitiveness.
Extensive reforms have been launched, particularly in the area of fiscal policy, in the labor market and in the restructuring of the banking sector. By reducing the excessive deficit by the end of 2014, Spain is pursuing a balanced fiscal consolidation strategy.
Furthermore, a fiscal balance rule has been enshrined in the Constitution. In addition, recent reforms in the national budgetary framework will contribute to a sustainable fiscal consolidation of the autonomous communities and, therefore, of all Public Administrations.
The current level of interest rates in sovereign debt markets does not correspond to the fundamentals of the Spanish economy, its growth potential and the sustainability of public debt.
The ministers underline the importance of working – together with the European partners – on the rapid implementation of the decisions of the European Council of June 29. This includes, in particular, the comprehensive construction of an effective banking union together with a single European banking supervision.
The ministers welcome the initiative of both countries to cooperate in the field of fighting youth unemployment and improving vocational training.