A woman walks past defaced Bankia sign in Madrid

BBC

Spain's decision to request a loan of up to 100bn euros ($125bn; £80bn) from eurozone funds to help shore up its struggling banks has won broad support, reports the BBC.

The International Monetary Fund (IMF) said the bailout was big enough to restore credibility to Spain's banks.

Washington welcomed the measure as a vital step towards the "financial union" of the eurozone.

The move was agreed during emergency talks between eurozone finance ministers on Saturday.

IMF managing director, Christine Lagarde said the plan for Spain should provide "assurance that the financing needs of Spain's banking system will be fully met".

"I strongly welcome the statement by the Eurogroup, which complements the measures taken by the Spanish authorities in recent weeks to strengthen the banking system," she said.

"The IMF stands ready, at the invitation of the Eurogroup members, to support the implementation and monitoring of this financial assistance through regular reporting."

US Treasury Secretary, Timothy Geithner welcomed the latest moves as "important for the health of Spain's economy and as concrete steps on the path to financial union, which is vital to the resilience of the euro area".

France's Finance Minister Pierre Moscovici said the deal would "contribute to restoring confidence in the eurozone".

The president of the European Commission, Jose Manuel Barroso, said he was confident that through bank restructuring and other reforms, Spain could gradually regain the confidence of investors and create the conditions needed for sustainable growth and job creation.

Earlier, Spanish Economy Minister Luis de Guindos announced that his country would shortly make a formal request for assistance.

He said the help would be for the financial system, not the economy as a whole. "This is not a rescue," he said.

De Guindos said the aid would not come with new austerity measures attached to the economy. Spain has already imposed strict economic reforms in a bid to tackle its debt problems.

The loan will bolster Spain's weakest banks, left with billions of euros worth of bad loans following the collapse of a property boom and the recession that followed.

Some banks borrowed large amounts on the international markets to lend to developers and homebuyers, a riskier strategy than funding it with deposits from savings.

The exact amount that Spain will receive will be decided after the completion of two audits of its banks, due to be completed by the end of June.