The exact amount that Spain will borrow from the eurozone will only be determined in September, finance ministers said, after approving the terms of a loan up to €100 billion.
A statement by the Eurogroup said the Fund for Orderly Bank Restructuring (FROB) will act as an agent for the Spanish government, providing funds and channeling the monry to the financial institutions concerned.
Ministers stressed the bailout would be accompanied by policy conditions, including bank restructuring plans and financial sector structural reforms.
Madrid will also have to honour its government deficit-reduction targets and commitments on structural reforms and the rebalancing of its economy, undertaken under separate procedures of the European Union. "Progress in these areas will be closely and regularly reviewed in parallel with the financial sector conditionality," the Eurogroup statement said.
Finance ministers added that they were "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."
Memorandum of understanding delayed
Eurozone ministers were expected to sign off on a lengthy memorandum of understanding (MoU) with Spain spelling out the terms of the aid, which will be handed over by the end of 2013.
But this will now happen "in the coming days", according to the 20 July statement.
The bank bailout - together with fresh austerity measures, structural reform and looser fiscal targets agreed with Madrid - is aimed at avoiding a full sovereign bailout that the eurozone can barely afford.
Madrid will receive €30 billion in a first payment that will be made available immediately for state-rescued banks, which urgently need funds.
An independent audit by consultancy firms Oliver Wyman and Roland Berger, published on 21 June, showed the banking sector needed up to €62 billion in total.
The news on the Spanish aid comes after Germany and Finland's parliaments voted in favour of their contribution to the Spanish bank bailout.
The German Parliament resoundingly approved Thursday (19 July) Berlin’s contribution to a eurozone-wide bailout of Spanish banks, already agreed in principle earlier this month.
The motion received 473 votes, with 93 votes against and 13 abstentions in the Bundestag, far more than the simple majority Chancellor Angela Merkel needed.
The outcome of the vote had been deemed a foregone conclusion after all of Germany’s political parties signalled they would give their support for the plan. Only the leftist Die Linke opposed the bailout.
But Merkel fell short of a symbolically important “chancellor majority” after 22 members of her own coalition voted against the bailout from the European Stability Mechanism (ESM).
Finland clears way for Spanish aid
The last political hurdle was lifted today (20 July) when Finland gave its approval for the Spanish rescue package, just hours before the conference meeting of the eurozone finance ministers.
Helsinki suggested earlier this month that it would attempt to block some the terms of the bailout deal - which requires unanimity across the eurozone countries - throwing the aid into doubt.
A total of 109 lawmakers supported the package in Finland’s parliament, with 73 opposed and 17 abstentions from opposition parties who are against eurozone bailouts.
Finland earlier secured a deal with Spain to receive collateral (40%) in exchange for its contribution of about €1.9 billion to the loans, modeled on a previous deal with Greece.