Germany and Finland prefer the European Stability Mechanism as the principal agency to bail out the Spanish banking industry over the temporary European Financial Stability Facility.

The European Stability Mechanism is a permanent rescue funding organization that will replace the European Financial Stability Facility starting next month. Loans made through the European Stability Mechanism have priority in the right of redemption over other bonds except for those issued by the International Monetary Fund (IMF).

Germany and Finland also stressed that although the bailout to Spain is aimed at saving the country’s banking sector, the rescue program must be implemented under the supervision of the European Union, the European Central Bank and the IMF.