BRUSSELS (Reuters) - Spain won European approval on Wednesday for a backstop scheme to recapitalize banks until the end of the year, while Brussels also backed Spanish bank BBVA's restructuring aid to help through the purchase of a smaller lender.
The European Commission said it gave Spain the go-ahead to provide urgent support to banks to cover their short-term capital needs until the end of December this year.
Spain aims to use the temporary mechanism to fund banks that need money quickly, since it could take three to four months for a European aid package of up to 100 billion euros ($120 billion) to reach the country's financial system.
"The scheme serves as a backstop facility to banks with urgent capital needs," the Commission said.
The EU executive also said guarantees given to BBVA as part of its purchase of UNNIM were in line with European rules.
Reporting by Robin Emmott; editing by Rex Merrifield