Spain is eligible for support from the European Stability Mechanism should it prove unable recapitalise its banks. However the ESM should not provide direct support to the banks in question.

Finance Minister Jan Kees de Jager made these remarks during a debate at the University of Amsterdam on Thursday.

“The fund is big enough to provide support to Spain,” De Jager said. “It is in the Netherlands best interest that Spain remain solvent. Our exposure to Spain is huge.”

The minister argued that Spanish banks should not be allowed to directly approach the ESM for assistance because this would see Dutch taxpayers shouldering all the risk.

De Jager emphasised that Spain would have to take measures to reform its labour market and fight youth unemployment to become eligible for financial support.

(gsh)

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