Spain's economic recovery is on track but the weak state of the economy is putting pressure on its banks, which therefore still need close monitoring, the head of the Eurogroup said.

"The liquidity position of the banks has improved," Jeroen Dijsselbloem, the Dutch finance minister, said in a letter to the Dutch parliament.

"However, the weak economic situation continues to put pressure on the Spanish banking sector. The situation in the banking sector should therefore be closely monitored."