The European Commission has approved plans to restructure four of the weakest Spanish banks, possibly marking a change in the country’s fortunes.

While activity in the Spanish property market is anything but subdued, prices are almost at rock bottom.

This may be good news for investors looking to pick up a bargain, but for those requiring asset growth in the short and medium term, the failure of prices to rise to the levels enjoyed prior to the market collapse is bad news.

Now the country looks set to receive nearly €37 billion (£29.9 billion) in fresh capital to bail out BFA-Bankia, NCG Banco and Catalunya Banc, while Banco deo Valencia will be sold to CaixaBank.

The money is hoped to enable the banks to exist in the long-term without state support, reducing balance sheets by 60 per cent by 2017.

European Competition commissioner Joaquin Almunia stated. "Restoring a healthier financial sector capable of financing the real economy is indispensable for economic recovery in Spain."

Once the economy picks up momentum, so too should the housing market, as confidence will return to the sector and lending should also increase.



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