MADRID: Spain's government said yesterday it will soon request a first payment for its deeply troubled banks from an emergency euro zone rescue line.
"The request will be sent shortly," a spokeswoman for the Economy Ministry said.
"It is being worked on," she said, declining however to specify the timing or exact amount of the request.
The money was being sought for crisis-torn Spanish banks that have already been nationalised: Bankia, Catalunya Caixa, NovaGalicia Banco and Banco de Valencia.
"The Bank of Spain is doing its analysis and that report is for the nationalised banks, so depending on that analysis they will see what request they need to make," she said.
Spain's euro zone partners agreed in June to lend up to 100 billion euros ($124bn) to salvage the nation's banks, buckling under record bad loans built up since a 2008 property crash.
The euro zone's bailout fund, the European Financial Stability Facility, has already put aside an emergency reserve of 30bn euros in case of urgent requests by Spain, a spokeswoman for the fund said.
Under a written agreement drawn up last month, the Bank of Spain can ask for a specific sum from that emergency reserve.
But any payment first needs the approval of the European Commission and officials of the 17-nation euro zone working in liaison with the European Central Bank (ECB).
The bulk of the rescue loan is expected to be disbursed from November onwards to help finance a restructuring and recapitalisation of the Spanish banking sector.
Meanwhile, the ECB is set to further loosen rules on banks tapping its funds to help Spanish and Italian lenders in particular.
Despite interest rates at a record low of 0.75 per cent, borrowing costs for businesses and households are much higher in the euro zone periphery than in the core, exacerbating the economic plight of countries like Italy and Spain.