Brussels: Spain may now avert a meltdown in its troubled banking sector as its banks will get up to 100bn euros in loans from eurozone funds to make them stay afloat.
Reportedly, the move was agreed at an emergency meeting of eurozone finance ministers after a conference call on Saturday.
A formal request for assistance would be made by Spain soon, said the country's Economy Minister Luis de Guindos.
He emphasised that the help would be asked for the financial system and not the economy as a whole.
Earlier Spain had appeared reluctant to seek help for a bailout from the European Union. Government officials in various European capitals and EU authorities in Brussels said on Friday evening that they are standing by to act immediately if the Spanish government finally makes a request for EU aid.
Spain’s banking crisis, which has been lingering for nearly two years, worsened after the fourth largest bank Bankia, which lost billions of euros through its exposure to the collapsed property market, had asked the government at the end of last month 19 billion euros to avert bankruptcy.
Bankia had already received from the Spanish government a financial support of 4.5 billion euros when it was partly nationalised last month and the total costs of rescuing the bank will go up to 23.5 billion euros.
With Agency Input
