$125 b Eurogroup bailout for Spain

 Eurozone finance ministers, on Saturday, said that the Eurogroup was “willing to respond favourably” to the tune of 100 billion euros ($125 billion) to a bailout request from Spain for its troubled banks.

“The Eurogroup has been informed that the Spanish authorities will present a formal request shortly and is willing to respond favourably to such a request,” the 17 ministers said in a statement issued after a two-and-a-half hour conference call.

The loan needed “to cover estimated capital requirements with an additional safety margin, estimated as summing up to 100 billion euro in total,” the statement added.

The bank bailout will be provided through a special bank recapitalisation facility in the eurozone rescue fune, the EFSM/ESM.

The statement also said the funds could be paid to Spain’s Fund for Orderly Bank Restructuring (FROB), which would then channel them to banks.

As for conditions in return for the loan, the Eurogroup said this should be “focused on specific reforms targeting the financial sector.”