Eurozone ministers approve aid for Spain

Euro zone finance ministers today approved an agreement to lend up to 100 billion euros to Spain so it can recapitalise its banks

In a conference call Friday, ministers signed off on a lengthy memorandum of understanding with Spain spelling out the terms of the aid, which will be fully disbursed by the end of 2013.

But before Spain can decide exactly how much money it needs, it must see the results of in-depth audits of its banking sector, which is riddled with bad property loans.

The bank rescue, and fresh austerity measures and looser fiscal targets agreed with Madrid, are aimed at avoiding a full sovereign bailout that the euro zone can barely afford. There are signs of growing discontent at the economic pain being heaped on the Spanish public. Hundreds of thousands of Spaniards marched against the centre-right government's latest measures on Thursday evening, following more than a week of demonstrations across the country.

Parliament approved on Thursday a package of 65 billion euros of spending cuts and tax hikes which are likely to deepen the recession already gripping Spain.

Madrid expects 30 billion euros in a first tranche of money
that will be available immediately for state-rescued banks that
urgently need funds.

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