Eurozone finance ministers approve terms of bailout loan for Spanish banks

BRUSSELS – Finance ministers from the 17 countries that use the euro unanimously approved Friday the terms for a bailout loan for Spanish banks of up to €100 billion ($122.9 billion).

The document, signed off by the “eurogroup” of finance ministers following a teleconference Friday, calls for strict monitoring of the banks that receive aid. It also requires the Spanish government to present this month plans to reduce its budget deficit to under 3 per cent of gross domestic product by 2014.

“The eurogroup is convinced that the reforms attached to this financial agreement will contribute to ensuring a return of all parts of the Spanish banking sector to soundness and stability,” the finance ministers said in a statement.

The agreement calls for an initial disbursement of €30 billion ($36.9 billion) this month.

The full amount of money needed to shore up Spain’s banks will not be known until September, after individual banks have been assessed.

“The aim of this program is very clear: to provide Spain with healthy, effectively regulated and rigorously supervised banks, capable of nurturing sustainable economic growth,” Olli Rehn, the European monetary affairs commissioner said in a statement.