They should also help to sever the problematic public finances/banking system feedback loop, a vicious circle which contributes to prolonging the climate of uncertainty and makes it difficult to resolve the problems facing the euro area. Nevertheless, it should not be forgotten that the scope of these actions is limited and that definitively overcoming the crisis in Spain will depend on the progress achieved in other domains, including those which depend on our own economic policy. The Spanish economy The challenges facing the Spanish economy are well-known: reducing its high dependence on external financing, sustainably correcting the budget imbalance and strengthening the drivers of medium- and long-term growth through substantial and lasting improvements in competitiveness. Naturally, completing the clean-up and restructuring of the banking system is also a key factor in this strategy, and I will briefly refer to this later on. Significant steps have been taken in addressing these challenges. Nonetheless, the ongoing adjustment of the Spanish economy is at a delicate juncture, since there are no perceptible improvements in activity and job creation because many of the measures taken are structural and will take some time to work fully through. The growth outlook for the coming quarters is still not favourable, as shown by the forecasts released by different organisations in the past few weeks, which point to a fresh contraction of activity in 2013. However, the adjustment undertaken is essential in laying the groundwork for a new phase of economic growth which will allow a substantial and lasting reduction in the unemployment rate.
In June the evaluation exercise was completed, enabling an estimate of the capital needs for the whole system to be made, and confirming that they were clearly below € billion; at the end of August the Royal Decree-Law on credit institution restructuring and resolution was approved, constituting a new code in this area; at the end of September the exercise was completed, enabling the capital needs for each of the banks participating in the exercise, which accounted for 90% of the Spanish banking system, to be determined; and, last Thursday, the Decree which will regulate the activity of the Asset Management Company for Assets Arising from Bank Restructuring (SAREB) was approved, another key step in the implementation of the programme agreed with the European Commission. The analysis concluded in September enabled the classification of banks for restructuring purposes to be confirmed. Previously, the banks without additional capital needs had already been determined (Group 0) as had the banks controlled by the FROB (Group 1), to use the terminology of the Memorandum of Understanding; this classification was completed, dividing the other banks with capital needs into: a) those with plans to achieve the capital levels required using their own means; and b) those which will require State aid to do so. The latter were requested to provide restructuring plans which are currently being studied.