The troubled lender Bankia, which has been recently taken over by the government, will soon receive funds to rescue it from the ongoing crisis. Spokeswoman of Economy ministry has informed that part payment for the 19 billion Euro funds promised to Bankia will be released shortly.
Bankia has exposure to real estate market in Spain. As the country has been in the news for the recent times due to financial issues, Bankia was promised state aid to sail through the troubled waters. The toxic property assets will be overtaken by agency created by the government. The Spanish government will pass laws to adhere to European rescue plan conditions.
Prime Minister Mariano Rajoy has tough target of brining down the borrowing cost for Spain and to clean the banking system of the country. The government is also trying to cut spending and to control the expenses of regional governments.
After the exposure of troubles in banking sector in Spain, Bankia, Catalunya Caixa, NovaGalicia Banco and Banco de Valencia were undertaken by government. The stock price of Bankia has doubled in the past one month after the government came to rescue. The stock had earlier plunged due to uncertainty about the future of the bank.
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