There has been much unhappiness in Spain about the state of the banks
Spain has formally requested a bailout loan for its banking sector from its eurozone partners.
Eurozone countries have agreed to lend up to 100bn euros ($125bn; £80bn).
No specific figures were given for the emergency loans, although independent audits last week said that the banks would need up to 62bn euros to stabilise themselves.
But Spain’s economy ministry said that the audits, and a report from the IMF, should be a starting point.
The request was made in a letter from Spain’s economy minister Luis De Guindos to Eurogroup chairman Jean-Claude Juncker.
The letter said that Spain planned to sign a memorandum of understanding for the package by 9 July, which would include details such as exactly how much would be borrowed.
It said the amount would be enough to cover all the needs of its banks and an additional security buffer.
Olli Rehn, European commissioner for economic and monetary affairs welcomed the request from Spain.
In a statement, he said: “Restructuring the banking sector is key to reinforce the confidence in the Spanish economy and to restore the conditions to proper access to credit by companies and households, thus for sustaining the recovery.”
He added that his staff were working on the conditions that would be applied to the loans, including conditions for the banks and for the supervision and regulation of the whole banking sector.
He also said that he expected Spain to work to make its public finances sustainable and bring down its deficit.
“There cannot be sustainable growth without sustainable public finances, both at national and sub-national levels,” he said.
“Progress in these areas will be closely and regularly reviewed in parallel to the financial assistance.”
A meeting of the Eurogroup, which includes the finance and economy ministers of the 17 eurozone members, was already planned for 9 July.
Spain’s banks have been struggling with bad loans following the collapse of its property market.
The economy ministry confirmed that it would be allocating the rescue funds to its banks through the state-backed Fund for Orderly Bank Restructuring.
The audits from the US firm Oliver Wyman and German firm Roland Berger modelled how much extra funding the banks would need in an adverse scenario with considerable contractions in the Spanish economy over the next three years and further falls in house prices.
Their research covered 14 banking groups that account for 90% of Spain’s banking sector.
The problems facing Europe’s banks will be on the agenda at the summit of European leaders on 28 and 29 June.
According to draft documents prepared for the meeting, which have been reported by news agencies, delegates will be discussing specific proposals for a European banking union.
The proposals include having a single European banking supervisor and a common scheme for guaranteeing bank deposits.
There would also be a central fund to wind down bad banks.
Options for the regulator include having one body, possibly the European Central Bank, to oversee the continent’s biggest banks, while another watchdog supervises the day-to-day operations of all the banks.
The proposals also include closer fiscal union, with the prospect of eurozone countries sharing debt raised again.
The idea of common debt is favoured by many eurozone countries, but opposed by German Chancellor Angela Merkel.
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