Spanish banks to get up to 100bn euros in rescue loans

Luis de Guindos says Spain has agreed to officially request assistance, but denies this is a bailout

Spain is to get up to 100bn euros ($125bn; £80bn) in loans from eurozone funds to try to help shore up its struggling banks.

The move was agreed during emergency talks with eurozone finance ministers.
Spain's Economy Minister Luis de Guindos said his country would shortly make a formal request for assistance.
He emphasised that the help would be for the financial system, not the economy as a whole. "This is not a rescue," he said.
"This is a loan which is given in very favourable conditions, which will be determined in the next few days. But they are very favourable - much more favourable than the market ones," Mr de Guindos told a news conference.
The Spanish government had been reluctant to ask for a bailout like the one given to Greece, Ireland and Portugal, as these rescue packages came with demands for spending cuts and stringent spending cuts.
Mr de Guindos said there would be conditions attached for the banks receiving the loans, but there would not be "micro-economic conditions" for Spain.
"We hope that as a result of these injections [of capital] families and companies will have more solvent banks which are able to offer them credit, which they are not able to do at the moment," he said.
The Eurogroup of finance ministers welcomed the decision from Spain, Europe's fourth-biggest economy, to ask for help.
Spain was keen to ensure that any assistance went directly to its banks, rather than to the central government. As a result, the loans will go to its bank restructuring agency, called FROB. But this would still considered state debt, Mr de Guindos said.
The Eurogroup said it "considers that the Fund for Orderly Bank Restructuring, FROB, acting as agent of the Spanish government, could receive the funds and channel them to the financial institutions concerned. The Spanish government will retain the full responsibility of the financial assistance".
No decision had been made on exactly who would disburse the funds, Mr de Guindos said, but he suggested this would be one of the European rescue funds, the EFSF or the ESM.