Spain has formally requested a bailout from its eurozone partners, who have agreed to lend up to 100bn euros.
No specific figures have yet been provided for the emergency loans, although independent audits last week said that the banks would need up to 62bn euros to stabilise themselves.
Spain's economy minister Luis De Guindos (pictured), who made the formal request in a letter to Eurogroup chairman Jean-Claude Juncker today, said that the audits, and a report from the IMF, would be a starting point.
The letter said that Spain planned to sign a memorandum of understanding for the package by July 9th, which would include details including exactly how much would be borrowed.
It said the amount would be enough to cover all the needs of its banks and an additional security buffer. The economy ministry confirmed that it would be allocating the rescue funds to its banks through the state-backed Fund for Orderly Bank Restructuring.
Olli Rehn, European commissioner for economic and monetary affairs welcomed the request from Spain. In a statement, he said: "Restructuring the banking sector is key to reinforce the confidence in the Spanish economy and to restore the conditions to proper access to credit by companies and households, thus for sustaining the recovery."
He added that his staff were working on the conditions that would be applied to the loans, including conditions for the banks and for the supervision and regulation of the whole banking sector.
He also said that he expected Spain to work to make its public finances sustainable and bring down its deficit.
"There cannot be sustainable growth without sustainable public finances, both at national and sub-national levels," he said.
"Progress in these areas will be closely and regularly reviewed in parallel to the financial assistance."
Spain's banks have been struggling with bad loans following the collapse of its property market.