The growth of 0.3 pp in euro area GDP in the second quarter of 2013 has, naturally, been a positive surprise and plots a favourable course for the Spanish economy. But its duration and intensity are by no means assured. Indeed, recently revised medium-term forecasts for the euro area as a whole continue to augur very moderate GDP growth rates and overly high unemployment levels. In the financial domain, the degree of market fragmentation is lessening considerably, but is still not fully compatible with the normal functioning of a monetary union and with efficient monetary policy transmission. The cost at which households, credit institutions and the different levels of government can currently finance themselves in the countries subject to most tension is still above what the ECB monetary policy stance would warrant. BIS central bankers’ speeches  1  The ECB has in fact continued to reinforce its expansionary monetary policy stance throughout the year, both through conventional conduct and through non-conventional or extraordinary measures. In May there was a fresh cut in official interest rates which, along with the maintenance of the unlimited liquidity provision policy, is serving to set money market interest rates at extremely low levels. In July the ECB Governing Council decided to take a further step in its strategy of reinforcing its expansionary monetary policy stance with the use of a new instrument, known in the parlance as “forward guidance”.
Against this background, each bank's capital needs were identified on the basis of a rigorous stress test and, in accordance with the European authorities, restructuring or orderly resolution plans were drawn up and approved for those banks requiring them. In 2012, backed by public financial assistance, the institutions classified under “group 1” of the Memorandum of Understanding were recapitalised, and their problem construction and real estate development-related assets were transferred to SAREB (the asset management company for assets arising from bank restructuring). Into 2013, the “group 2” institutions subject to the exercise have been recapitalised, their troubled assets have been transferred to SAREB and the hybrid instrument management (burden-sharing) exercises have been conducted at all banks requiring them, except at one, where they began recently and will be concluded in the coming days. The public financial assistance to financial institutions in various forms of capital, since May 2009, has risen to € billion, € billion of which were under the Financial Assistance Programme agreed with the European authorities. Verification by the international authorities of the fulfilment of the conditions agreed in the July 2012 Memorandum of Understanding, the last round of which concluded only a few days ago, confirms that the Memorandum and its deadlines have been strictly adhered to and that the main objective, the restructuring and recapitalisation of our banking system, has progressed satisfactorily. As earlier stated, the Council of the European Union will shortly approve the Regulation governing the SSM, which will commence operating after a transitory period of one year.