UPDATE: Spain's banks are to receive loans from the Eurozone funds to prop up their troubled financial sector, the country's economic minister has confirmed.
Spain is expected to request a bailout for its beleaguered financial sector from European finance ministers over the weekend, according to senior EU sources, Reuters has reported.
Spain's appeal for international help propping up its banks is expected to be the focus of a conference call between 17 euro zone members that began at 3pm BST Saturday, the BBC reports.
European Central Bank Vice-President Vitor Constancio told Portugese radio earlier on Saturday that it was expected that "Spain will formulate a request for aid exclusively for banks recapitalisation."
Spain has continued to deny it is seeking EU funds to bailout its financial sector, with an spokeswoman from the economy ministry telling AFP news agency on Saturday that "there has been no change."
However an International Monetary Fund report published late last night and a downgrade of the country's credit worthiness fuels reports that the country needs international help to drag itself from the financial mire.
"Important vulnerabilities remain in the system" the IMF said in its assessment review on Friday, estimating that the amount needed to shore up Spain's financial sector was 40bn euros or £32bn. However Fitch Ratings who slashed Spain's credit rating by three points, estimated almost a third more, reporting that the country needed 60bn euros or £49bn.
However Jean-Claude Juncker, who chairs the Eurogroup of finance ministers, stressed that Spain's situation was incomparable to Greece in an interview with German radio, reports Reuters.
His assessment 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.
However there is still international anxiety over the need to shore up Spain's floundering financial sector quickly. "There will need to be a quick solution" Jean-Claude Juncker told German radio.
Spain's Prime Minister has said that any decision to ask for international help would come after the results of an independent audit of their banks are published, in two weeks time.
However there is increasing pressure for Spain to form a bailout agreement before Greece goes to polls on 17 June, amid fears that euro zone turmoil prior to the election could encourage Greeks to vote against the euro.