Finance ministers from the 17 countries that use the euro unanimously approved today the terms for a bailout loan for Spanish banks of up to $122.9 billion. The document, signed off by the "eurogroup" of finance ministers following a teleconference today, 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% of gross domestic product by 2014.
The agreement calls for an initial disbursement of $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," said the European monetary affairs commissioner in a statement.