BRUSSELS (MNI) – The European Commission on Friday said EU banking
regulators should finalise criteria to be used in a recapitalisation
plan for the sector by the end of next week and expressed its confidence
in the Portuguese government’s commitment to pursue reforms linked to
its EU-IMF bailout programme.
The European Banking Authority is expected to finalise criteria to
be used in a reassessment of EU banks’ capital needs before EU finance
ministers meet at the end of next week, said a spokesman for the
Commission at a daily briefing.
Banks need to increase capital “so as to restore confidence and in
that way free-up funding to flow to the real economy,” he said.
The spokesman also expressed confidence in Portugal’s commitment to
reforms. “We are sure about the determination of Portuguese authorities
to do whatever necessary to meet the targets,” the spokesman said. The
situation is “very challenging,” he said, noting that Portugal had put a
“strong emphasis on structural reforms and growth enhancing reforms.”
Analysts expect Portugal to undertake tougher budget-cutting
measures in 2012 to compensate for an unexpected shortfall this year
which emerged after the discovery of a larger-than-expected shortfall in
the region of Madeira.
A failure to meet the targets could jeopardized the country’s
chances of receiving further disbursements of aid from Eurozone
countries and the International Monetary Fund.
–Brussels Bureau, +324-952-28374; pkoh@marketnews.com
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