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Spain banks well capitalised, ready to lend: ECB head

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(Globalpost/GlobalPost)

Spain's banks are sufficiently capitalised and strong enough to lend again, European Central Bank chief Mario Draghi said Tuesday, citing "positive signs" for the eurozone's fourth-biggest economy.

"Today Spanish banks are properly capitalised ... so in a position to give credit," Draghi told a news conference after a closed-door meeting with members of the Spanish parliament.

Credit has dried up over recent years in Spain, which last year had to seek tens of billions of euros in bailout funds from the eurozone to rescue its finance sector.

Draghi was credited with saving Spain from a full sovereign bailout last year when his pledge of support by the ECB helped bring Madrid's borrowing costs down from danger levels.

Spain's conservative government is counting on its austere budget cuts, labour reforms and other crisis measures to stabilise its finances and strengthen the economy in the long run.

"Spain is on the right track. There are several positive signs," such as improving exports and structural reforms announced by the government over the past year, Draghi said.

"Enormous progress has been achieved," he added, but he warned that "none of the countries of the euro area has finished working" on the necessary economic reforms.

Draghi hailed "the efforts carried out by Spanish citizens" who are suffering a long recession that has driven the unemployment rate above 26 percent.

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http://www.globalpost.com/dispatch/news/afp/130212/spain-banks-well-capitalised-ready-lend-ecb-head