By Matina Stevis
BRUSSELS--Once Spain makes a formal request for a euro-zone loan to refinance its ailing banks, the European Commission, the European Central Bank, the European Banking Authority and the International Monetary Fund will carry out an analysis to determine how much aid is needed, the European Union economics chief said in a broadcast statement Sunday.
The government in Madrid agreed late Saturday to request up to 100 billion euros ($125 billion) in EU aid for Spain's banks, following discussions among euro-zone finance ministers.
"The next steps--following the Spanish announcement and the Eurogroup statement--there will be soon a formal request by Spain, then the European Commission, in liaison with the European Central Bank, the European Banking Authority and the IMF will conduct a profound analysis of the needs of restructuring and recapitalization of the banking sector in Spain," Olli Rehn said.
A formal request by Spain is expected before June 21, when euro-zone finance ministers meet in Luxembourg and after a detailed report is issued by two Madrid-appointed advisors on the banks' capital needs.
Mr. Rehn added that "subsequently we will define the financing needs from the euro area member states and once that is done we can then proceed to sign a memorandum of understanding with Spain."
He said the aid would include conditions relating to the Spanish financial system and banking sector and to their reform and restructuring, but said Madrid won't be asked to implement structural reforms or fresh austerity measures because it has already done so under the normal EU economic-policy monitoring framework, known as the European Semester.
Write to Matina Stevis at [email protected]