Spain’s Economy Minister Luis de Guindos said his country would shortly make a formal request for assistance.
The minister said that the monetary assistance would be only for banking institutions and not the economy as a whole. "This is not a rescue," he said.
According to media reports, de Guindos 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."
Since the sovereign debt crisis, which had emerged two years ago, Spain will become the fourth eurozone state to receive financial help.
"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," the finance minister added.
The needs of the Spanish banking sectorwill be assessed by a team of experts from the EU, the European Central Bank and the International Monetary Fund following which the real bailout package will be announced.
According to a report from IMF, Spain has already pumped nearly EUR34bn into the banking system and very recently nationalized Bankia, its fourth largest bank, which last month requested EUR19bn.
The fund will be provided through two channels, created to help eurozone members in financial distress such as the European Financial Stability Facility (EFSF) and the European Stability Mechanism (ESM).
European Commission president Jose Manuel Barroso and vice president Oli Rehn said, "With this thorough restructuring of the banking sector, together with the on-going determined implementation of structural reforms and fiscal consolidation, we are certain that Spain can gradually regain the confidence of investors and market participants."
