EU clears Spanish scheme to buy financial assets

BRUSSELS (Reuters) - The European Commission said on Tuesday it had approved a Spanish scheme intended to stabilize financial markets by providing liquidity to eligible financial institutions.

Following close cooperation with Spain and the submission of commitments to ring-fence the application of the measures, the Commission found the scheme to be in line with its guidance on state aid to tackle the financial crisis, the EU executive said.

The package provides for non-discriminatory access, is limited in time and scope and foresees adequate safeguards to minimize distortions of competition, a Commission statement said.

"The Spanish fund for acquisition of financial assets has been properly designed to boost market confidence and avoid distortions of competition," Competition Commissioner Neelie Kroes said in the statement.

"The decision, once again, shows that state aid rules are part of the solution for the financial crisis," she said.

(Reporting by Dale Hudson)