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The IMF and US both praised a Eurogroup deal giving Spain a lifeline of up to €100 bn ($125 billion) to save its stricken banks, with International Monetary Fund Managing Director Christine Lagarde calling it a "credible back stop" for the banking system.
"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," said Lagarde.
"Providing a credible back stop to recapitalize weaker segments of the banking system has been a key recommendation of the IMF's recent Financial Sector Assessment Program (FSAP) conducted in Spain," she said.
Lagarde also had words of praise for the operation's scope.
"The willingness of Spain's Euro Area partners to financially support the Fund for Orderly Bank Restructuring (FROB) with up to EUR 100 billion is a crucial step for the success of the Spanish authorities' strategy," she said.
"This scale of proposed financing, which is consistent with the capital needs identified in the FSAP, gives assurance that the financing needs of Spain's banking system will be fully met.
"The IMF stands ready," said Lagarde, "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 also welcomed the moves, saying: "These are 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."
German Finance Minister Wolfgang Schaeuble also hailed the deal for Spain, saying he and his colleagues welcomed Madrid's "determination" to recapitalise the banks with "rescue funds".
His French counterpart Pierre Moscovici called it a good agreement which gives "a very strong signal of solidarity" among Spain's eurozone partners.
Japanese Finance Minister Jun Azumi joined in praising the lifeline Sunday, calling it a "major first step" toward stabilising the European and global economy.
"The confirmation of the scheme worth 10 trillion yen (100 billion euros or $125 billion) should greatly contribute to stabilisation," Azumi told local reporters, referring to both the global economy and Spain's troubled banking system.
"I hope that such actions will continue to be taken flexibly with a sense of speed. In that respect, I think this is a major first step," he said.
After the hastily organised video conference, lasting more than two hours on Saturday, the 17 eurozone finance ministers issued a statement saying they were "willing to respond favourably" to a Spanish plea for help.
The deal marks a dramatic climbdown for Spain, where successive governments have hotly denied any need for outside aid.
Prime Minister Mariano Rajoy's conservative government finally bowed to pressure from world leaders and, more importantly, the markets, which have sent Spanish borrowing costs soaring.
"The Spanish government declares its intention to solicit European financial help for the recapitalisation of those banks that need it," a visibly tense Economy Minister Luis de Guindos told a news conference.
De Guindos refused to describe the aid as a rescue deal, which his government had categorically ruled out right up to the last moment.
"This has nothing to do with a rescue," he insisted, arguing that the aid would be directed to the 30 percent of banks with the greatest exposure to the 2008 property market crash.
The deal imposed no conditions on the overall Spanish economy, and no new austerity measures, de Guindos stressed.
"The only conditions are for the banks," the finance minister said, conceding however that the deal will further increase Spain's mushrooming public debt.
Nevertheless, the eurozone ministers said they were confident Spain would honour commitments to cut the deficit and restructure the economy. "Progress in these areas will be closely and regularly reviewed," they said in the statement.
Spain, which will become the fourth eurozone state to receive financial help since the sovereign debt crisis erupted two years ago, finally sought aid as the cost of buttressing the banks spiralled in past weeks.
Recently nationalised Bankia, which has the largest exposure to the real estate sector, needs 19 billion euros to repair its books.
Under Saturday's deal, up to 100 billion euros would be provided by the European rescue mechanisms to recapitalise Spanish banks, the eurozone ministers said, providing an "effective backstop" for all possible requirements.
"So we have a new concept. A 'lite' bailout with no material conditions on the sovereign and instead merely the banks that apply," Lloyds Banking Group economist Charles Diebel said in a report.
"This is the latest in the long list of euro measures to stem the crisis. Will it be enough? That's questionable as it is still prevention rather than cure and again only keeps the banking sector alive rather than really supporting growth."
The scale of the aid depends on an external audit being carried out for Madrid by consultants Roland Berger and Oliver Wyman. The audit is due by June 21 but de Guindos said it would ready within a few days.
De Guindos stressed that the 100 billion euros included a big safety margin.
"This announcement is good news for the Spanish economy and for the future of the eurozone," he said.
International Monetary Fund bank stress tests, unveiled Friday three days ahead of schedule, determined that Spanish banks need about 40 billion euros in new capital.
But an IMF official noted that the banks would probably need more than that to build a "credible firewall".
The assistance is to be channelled through Spain's state-backed bank Fund for Orderly Bank Restructuring, eurozone policymakers said.
Policymakers hope the rescue will satisfy financial markets and put Spain in a safe harbour ahead of the Greek elections on June 17, which risk leading to a destabilising exit from the eurozone.