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In what has been viewed as a major part of the rescue of the Spanish economy, Europe finally handed over the money to bail out Spain’s ailing banks, giving out billions of euros in exchange for a sweeping series of cuts and restructuring throughout the banks’ businesses.

The bank that’s been grabbing most headlines due to this is Bankia, which has been nationalised and was found to be in dire financial straits once the economic downturn started rearing its head. They will be making some of the biggest cuts and will go through significant restructuring under the agreement with the European Union. It was rather inevitable as, in Spain, Bankia is one of the “too big to fail” banks.

The smaller bank, Banco de Valencia, has also been bailed out, even though some people had expected it to simply be dismantled. The man in charge of the decision, European Union competition commissioner Joaquín Almunia, says that doing so was cheaper in the long run: “Our objective is to restore the viability of banks receiving aid so that they are able to function without public support in the future.”

The banks will have their toxic assets and loans moved off to a different company, where they will be dissected and anything that can be sold off will be, the rest will simply be dissolved. This means that the remaining sections of the bank are able to operate at a profit and the banks are free to concentrate on rebuilding the Spanish economy.

José Ignacio Goirigolzarri, Bankia’s chairman, followed the announcement by saying “Now that our institution is financially sound, we shall focus on making it profitable because that is the best way to reward our shareholders and also, of course, Spanish taxpayers, so they can recover their investment.”