Eurozone finance ministers approved yesterday (3 December) the disbursement of nearly €40 billion to help shore up Spain's strained banking system.
Spain on Monday requested formally the disbursement of €39.5 billion of European funds to recapitalise its crippled banking sector, the Economy Ministry said in a statement.
The money – €37 billion for the four nationalised banks Bankia, Catalunya Banc, NCG Banco and Banco de Valencia and €2.5 billion for the so-called "bad bank" – should be paid to the state's banking fund FROB around December 12, it added.
Eurozone finance ministers approved the disbursement yesterday evening at their monthly meeting in Brussels.
Jean-Claude Juncker, president of the Eurogroup, said the money should be available during the course of next week as Spain had met all the required conditions.
"We have also welcomed the decision by the ESM [bailout fund] board of directors to authorise the first tranche of the programme of up to €39.5 billion. The disbursements will be made in mid next week," Juncker said.
Spanish economy minister Luis de Guindos said the €37 billion aid would have "a 12-1/2 year maturity with a grace period of 10 years and an interest rate that is clearly below 1% and at least in the first year, will be just above 0.5%".
"We believe these are advantageous conditions, that will help heal, restructure and overcome the problems in the Spanish banking system," De Guindos said.
The Spanish minister also stressed it was "vital" that "the mistakes of the past" are not repeated. "The money will be in the FROB [Spain's 'bad bank'] from around 12 December and can be injected into the four nationalised banks."
"Some savings banks that haven't been nationalised have presented their own restructuring plans and will be approved by the end of December and they will need a lot less, around €1.5 billion at most."
The three nationalised Spanish banks will more than halve their balance sheets in five years, cut jobs and impose losses on their creditor bondholders in return for the EU aid, while a fourth will be sold off, the European Commission said in November.