EU welcomes lower-than-expected Spain bank bailout bill

(BRUSSELS) - The EU welcomed Friday an independent report on Spain's troubled banks showing they needed a less-than-expected 59.3 billion euros in fresh capital, clearing the way for their restructuring.

"I am comforted by the fact that the total capital shortfall ... comes out at slightly less than 60 billion euros," said Jean-Claude Juncker, head of the group of eurozone finance ministers, as the report was unveiled in Madrid.

The European Union agreed in June to provide up to 100 billion euros ($130 billion) to help Spain stabilise its banks, stricken by a mountain of bad loans after the collapse of a massive property sector bubble in 2008.

Fixing the banks is part of wider efforts to balance the public finances and put the Spanish economy back on track, with Madrid announcing Thursday a another tough austerity package of spending cuts and tax hikes.

Juncker, also Luxembourg premier, said the lower amount reflected measures to be taken by the banks and meant that the bailout funding agreed earlier included a "comfortable margin."

"It should ensure that the recapitalisation process of banks can proceed efficiently and in accordance with previously agreed timelines," he added.

A separate statement by the European Commission said the report marked a major step towards implementing the aid programme for the banks, with first payments likely to be made in November.

The banking report was led by US financial consultants Oliver Wyman who examined Spain's 14 major banking groups accounting for 90 percent of the struggling financial system.