MADRID (AP) - Finance ministers from the 17 countries that use the euro say they are ready to give Spain up to $125 billion in a bailout to help save its ailing banking sector.
The eurogroup says the money would come from Europe's bailout funds and that the final amount would be determined by an audit that Spain is currently undertaking. The group says the loan should include current needs and also a "safety margin."
The money will go directly to a fund set up by Spain to recapitalize ailing banks, but the government will ultimately be responsible for the loan.
U.S. Treasury Secretary Timothy Geithner says Spain's request for a bank rescue and Europe's willingness to prop up the country with financial aid are welcome actions toward stemming the region's debt crisis.
In a statement, Geithner says Spain's bailout plan and the commitment by its European partners to provide support are "concrete steps on the path to financial union, which is vital to the resilience of the euro area."
There are fears that Europe's economic crisis could reach across the Atlantic and drag down the fragile U.S. economy.