Spain's banks are to receive a bail out of up to 100 bn euros of European funds. However the country has avoided the imposition of tough austerity measures, as it is only banks that will receive the funds, rather than the government itself.
The country's economic minister Luis de Guindos told a Madrid press conference that the banks would receive "significantly" more than the 40bn euros (£32bn) the IMF had suggested was needed on Friday.
The exact amount will be announced after an independent audit of Spain's banks is released in just over a week.
The banks will have to meet certain conditions under the loan, but social and political conditions will not be affected, Guindos told the conference.
He said the terms of the loan were " very favourable - much more favourable than the market ones," reports the BBC.
Guindos was keen to point out that "this was not a rescue" reports Bloomberg and also that not every bank will receive a loan.
Although Guindos downplayed the loan, the Swedish Prime Minister Fredrik Reinfeldt told Swedish public radio SVT that the bailout was "in fact a question of one of the biggest financial rescues in recent history", reports The Telegraph. Spain is the fourth biggest country in the euro zone.
Additionally Spain will still shoulder the debt as a nation, because the government will still hold ultimate responsibility for the loan. The Spanish government's Fund for Orderly Bank Restructuring (FROB) is to receive the money, before channelling it to the various banks.
"The Spanish government will retain the full responsibility of the financial assistance" a statement from the Eurogroup said.
However Spain has managed to escape a visit from "the men in black" the Spanish name for the faceless financial figures from the IMF who impose tough austerity measures which have been so often accompanied with political and social turmoil.
It is likely that the money will come from the European Financial Stability Facility (EFSF) or the rather than the International Monetary Fund (IMF).
Saturday's bail out announcement came following an emergency conference call between 17 members of the eurozone.
There had been increasing pressure on both the eurozone and Spain to find a "quick solution" to the country's financial crisis before the Greek elections later in June.
"There will need to be a quick solution" Jean-Claude Juncker who chairs the Eurogroup of finance ministers, told German radio earlier.
An International Monetary Fund report published late last night and a downgrade of the country's credit worthiness fuelled anxiety that the country needed international help to drag itself from the financial mire.
"Important vulnerabilities remain in the system" the IMF said in its assessment review.
His Junker's assessment which argued that Spain's situation was incomparable to Greece was backed by IMF's report which stated that the "core of Spain’s financial sector is well managed and appears resilient to further shocks." Spain's top banks BBVA and Banco Santander performed well under IMF stress tests , reports AFP.
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