Spain’s Economy Minister Luis De Guindos said in the letter to Eurogroup chairman Jean-Claude Juncker that the final amount of the financial assistance would be set at a later stage but should be enough to cover all banks’ needs plus an additional security buffer.

He also confirmed his intention to sign a Memorandum of Understanding for the package, which would include full details, by July 9, The Globe and Mail reported.

Spain’s difficulties in raising money via the sovereign bond markets, and its admission two weeks ago that it needed aid for its domestic banks, has fuelled expectations among investors that the country would become the fourth member of the euro zone after Greece, Ireland and Portugal to need a full rescue.

As a condition of the bank bailout for Madrid, Spain’s euro zone partners are likely to require a deep restructuring of the Spanish domestic banking sector, which could involve the creation of one or more “bad banks” to house property assets and the forced liquidation of insolvent institutions.

Meanwhile, Germany wants Spain to borrow from the European Stability Mechanism, the bailout fund expected to be launched next month, because it has “seniority” over other creditors and thus safeguards German and other contributors in the event of a default.

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