SPAIN’S Prime Minister yesterday called for a European banking union to be in place by December, on a day in which the troubled Eurozone state was itself forced to rescue the region of Catalonia.
Speaking after a meeting with European Council chief Herman Van Rompuy, Mariano Rajoy said that decisions made in June over forming a banking union to mitigate the debt crisis should now begin to be implemented.
Van Rompuy echoed the Spanish PM’s call. “As the crisis in Spain has highlighted, progress on the banking union is particularly urgent,” he said. “Setting up a single banking supervisor covering all banks in the euro area is key in this context.”
Both politicians also agreed on their determination to keep the Eurozone together, despite the ongoing debt crisis. “Let there be no doubt: the euro is irreversible,” said Van Rompuy. “And let me insist again: Greece’s future is undoubtedly in the euro area.”
And Rajoy said a so-called Grexit would amount to a “collective failure of Europe”.
Earlier in the day the Catalonian region said it required €5bn (£4bn) from the central government in order to keep servicing its debts.
When asked about the situation, Rajoy confirmed that Catalonian authorities had tapped the Spanish state’s liquidity facility.
Meanwhile economic data confirmed that the Spanish economy shrank by 0.4 per cent in the second quarter – reflecting a worse than previously expected dip of 1.3 per cent on an annual basis.