MADRID (Reuters) - Stability of the euro area needs the adoption of a single supervisory mechanism for the bloc's banks by the end of this year, Spain and France said on Wednesday in a joint statement following bilateral talks in Paris.
"Our common strategy for the stability of the Euro area includes the adoption, by the end of this year, of a single supervisory mechanism for banks of the Euro area, involving the ECB," Spain's Minister of Economy Luis de Guindos and French counterpart Pierre Moscovici said in a joint statement.
"We expect proposals by the Commission by September and commit to a swift negotiation. This supervisory mechanism will open the way for direct recapitalisations with appropriate conditionality."
De Guindos and Germany's Finance Minister Wolfgang Schaeuble also called for swift implementation of the European Council decisions of June 29 on Tuesday, though they did not put a time frame on the creation of a single bank mechanism.
Current Spanish debt yields do not reflect the economic fundamentals, its growth potential and the sustainability of its public debt, the French and Spanish economy ministers said.
Reporting By Paul Day; Editing by Clare Kane