es flag go to the original language article
This article has been translated by Artificial Intelligence (AI). The news agency is not responsible for the content of the translated article. The original was published by EFE.

Spain will be the first country to exit European surveillance after receiving a bailout

by AI | 26.Nov 2025 | Europe in brief AI

Brussels.- Spain will exit the European supervision program at the end of this year after the banking rescue it received from the European Union (EU) since it will have already repaid 75% of it, making it the first country in the bloc to leave this monitoring system.

The European Commissioner for Economy, Valdis Dombrovskis (l), speaks with the Spanish Minister of Economy, Carlos Cuerpo (r), in Brussels, Belgium, in a file photo. EFE/EPA/OLIVIER HOSLET

This is reflected in the report published this Tuesday by the European Commission (EC) and the European Central Bank (ECB), the last of this surveillance cycle, which states that the outlook for the Spanish economy is “favorable” despite some “vulnerabilities,” that public finances “continue to improve,” and that the banking sector is “profitable” and “resilient to risks.”

Once Spain makes the next scheduled payment of 4.6 billion euros in December, it will have repaid more than 75% of the 41.333 billion it received in 2012 and 2013 to clean up and restructure its banking sector, allowing it to move past the semi-annual visits from community institutions to assess its economic and financial situation.

The exit will come sooner than expected since Spain has made several voluntary repayments in recent years to accelerate the return, which should be completed by 2027.

Strong Growth

In the report, the EC and the ECB note that the economic outlook is favorable, but warn that there are vulnerabilities that need to be analyzed, such as geopolitical tensions, low productivity growth, rising labor costs, and bottlenecks in housing supply.

Public finances, they note, “continue to improve,” with a reduction in the deficit to 3.2% of GDP in 2024 despite the cost of aid due to the flooding and debt rising to 101.6% of GDP thanks to “strong economic growth,” increased tax revenue, and the gradual elimination of energy subsidies.

These factors also favor Spain’s ability to maintain a good capacity to pay its public debt, the institutions state, which consider the financing conditions of the central government to be “favorable” and point out that the reduction in the risk premium (the differential with German bonds) indicates “continued market confidence in Spain.”

However, they point out that the increase in the cost of outstanding debt, although from low levels and gradually, combined with the high public debt ratio requires “close attention.”

Financial Sector

Regarding the financial sector, they highlight its profitability and resilience to risks, but note that the capitalization of Spanish banks has only slightly improved as entities “have opted for significant dividend payments and share buybacks” and that the CET1 maximum quality capital ratio (13.6%) is the lowest in the EU, although it meets European requirements.

The risks to financial stability, they point out, are “contained” and are mainly linked to global geopolitical tensions, as well as weak economic growth and currency devaluation in key foreign markets, such as Latin America, while internally, recent increases in housing prices, new mortgages, and loan-to-value ratios “could justify greater vigilance.”

In addition to Spain, Greece, Portugal, Ireland, and Cyprus are subject to this type of post-rescue surveillance until they repay at least 75% of their respective rescues, which, unlike the Spanish one, were not limited to banking. (November 25)