Spanish banks see rise in outstanding debts in March

Unpaid debts of private individuals and companies owed to Spain's banks rose by 10.47 in March, the Bank of Spain said on Friday. Outstanding debt levels had fallen after the creation of a "bad bank" Sareb, taking on board the toxic assets accumulated by struggling banks such as Bankia, Catalunya and Novagalicia Banco. However, despite the creation of Sareb, the amount of unpaid debt to Spain's banks was still 2.1 percent above the level of unpaid debt in March 2012. Spanish Prime Minister Mariano Rajoy on Thursday stressed the need for a greater banking union in the European Union. The fact that debt appears to be on the rise again in Spain highlighted Spain's need for a banking union as soon as possible. However, experts say it also gives reasons why some EU countries may be reluctant to move rapidly in such a direction. Meanwhile, Miguel Blesa, former president of Caja Madrid - one of the banks which became part of Bankia - was sent to prison as a result of corruption allegations. Blesa is under investigation for alleged irregularities in the bank's purchase of City National Bank of Florida.