Spain asks for aid to recapitalise banks Luis de Guindos, Spanish economy minister, on Monday formally requested up to €100bn from the country's eurozone partners to help recapitalise Spanish domestic banks which are burdened by bad loans to property and construction companies and by a continuing sovereign debt crisis. In a letter to Jean-Claude Juncker, the Luxembourg prime minister who heads the eurogroup of eurozone finance ministers, Mr de Guindos confirmed that the aim was to agree details and conditions of the loan in a memorandum of understanding before the next eurogroup meeting on July 9. "I have the honour to address you in the name of the Government of Spain to make a formal request for financial help for the recapitalisation of Spanish financial institutions that may require it," the letter said. Mr Juncker confirmed receipt of the letter, saying that ministers expect to give a mandate to the European Commission, the European Central Bank and the European Banking Authority to negotiate the conditions of the bailout. Olli Rehn, the EU's top economic official, said on Monday that he had instructed his staff to "step up their work" on assessing the Spanish banking sector, saying the recently released audit by two private consultancies were "a good starting point" and that a rescue deal could be reached in a matter of weeks. Mr Rehn said that while conditions on the bailout loans would only apply to "banks being recapitalised and to the Spanish financial sector as a whole," the European Commission would continue to monitor Madrid's commitments to fiscal and economic reform. "There cannot be sustainable growth without sustainable public finances, both at national and sub-national levels," Mr Rehn said in the written statement. Progress in these areas will be closely and regularly reviewed in parallel to the financial assistance. Funds will go to Spain's state Fund for Orderly Bank Restructuring (Frob), which will direct the money to banks in need. The process will be closely monitored by the European Commission, the ECB and the International Monetary Fund as well as by Spanish institutions. But European institutions and governments have voiced differences over how to apply the bailout and broader fiscal and banking reforms needed to restore investor confidence in the debt of countries such as Spain and Italy.