The European Commission has imposed a 60% size reduction on the nationalised banks (Bankia, Catalunya Caixa, Novagalicia Banco and Banco de Valencia) by 2017 as a condition for the injection of €37 billion from the bailout fund.
The European Commission has also approved the sale of Banco de Valencia to Caixabank. As regards Catalunya Caixa and Banco Novagalicia, the Spanish government has agreed to sell the entities before the end of the restructuring period of five years. In the event that the sale is not possible, the Spanish authorities must submit a plan for their orderly liquidation.
According to the restructuring plans approved by the EU executive, the shareholders and holders of subordinated and preferential debt should also contribute to the restructuring plans. Their contribution would reduce the amount of state aid needed by around €10 billion, according to estimates from Brussels.