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Brussels (AFP)

EU competition authorities gave the formal green light Tuesday to the sale of Spain's Banco Popular to compatriot Santander, the first major test of Europe's new system for dealing with failing banks.

The approval by the European Commission comes just over two months after the European Central Bank -- which took on the role of the eurozone's banking supervisor in 2014 -- allowed the sale to go ahead for a symbolic fee of one euro.

"The commission concluded that the transaction would not raise competition concerns in the European Economic Area," the commission said in a statement, referring to the 28 European Union nations plus Iceland, Liechtenstein and Norway.

An investigation by the commission found that the two banks' combined market share would be less than 25 percent, adding that "strong competitors will remain in all affected markets."

"Today's decision is the final step by the commission clearing the acquisition," it said.

The ECB had announced on June 7 that Banco Popular was "failing or likely to fail" and should therefore be sold to Banco Santander.

The Spanish government said that Popular would not have been able to remain open without the buyout, adding that it had both preserved people's savings and avoided the expenditure of any public funds in keeping the bank afloat.

© 2017 AFP