Spain continues to pay early the loans, received by the European Stability Mechanism (ESM), which were released to rescue the country’s banking system. The country already sent request for early settlement of 1 billion EUR repayment to the institution, which aims to reduce the country’s debt. So Spain will make the fourth early repayment of loam, obtained by the micro-financing program. After paying this amount, the indebtedness of the country to the ESM will be 34.7 billion EUR and the last settlement should be completed in 2027.
“The Board of Directors approved the request of Spain early to settle 1 billion EUR repayment of loans to the ESM”, says the documents of ESM.
In 2012 and 2013 the government received loans amounting to 41.3 billion EUR from ESM to recapitalize its banks against the promise of reform. Currently the value of the debt is 34.7 billion EUR, as the country succeeded to pay settlements earlier.
At present, the Spanish government faces the heavy task to approve the budget 2017. Spain must reduce its deficit to 4.6% of gross domestic product (GDP) this year and to 3.1% in 2017, according to the targets set by Brussels.
Meanwhile, the reducing of unemployment remains a major challenge. After the unemployment reached 27% at the end of 2013, Spain returned to a level of 18.9%, which was the lowest in nearly six years, but still the highest in the EU after Greece.
The ten months of political deadlock seemed to have had a negligible impact on economic growth, which remains one of the most dynamic in the Eurozone after Spain escaped from recession in 2014. Spanish Central Bank foresees an increase of 3.2% of GDP in 2016, which is slightly more optimistic than the government forecast for growth of 2.9%. The party won much of the decline in oil prices, interest rates and the depreciation of the European currency.
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