German MPs are debating the proposed eurozone bailout of up to 100bn euros (£78bn; $122bn) for Spanish banks and are expected to vote in favour, BBC News reported.
German Finance Minister Wolfgang Schaeuble warned the Bundestag (lower house) that the eurozone risked contagion from Spain's weak banks.
Germany is the biggest contributor to the temporary bailout fund, the EFSF, but Berlin is reluctant to underwrite the debts of struggling EU countries.
Spain's banks face close supervision.
Yet Spain is not getting a full-scale bailout like the programme organised for Greece, because Spain's problems are different – rather than a colossal debt burden, its biggest challenges are record unemployment and poor competitiveness.
The successor to the EFSF, the 500bn-euro European Stability Mechanism (ESM), has been agreed by eurozone politicians, but Germany's constitutional court is now scrutinising it.
Some MPs in Chancellor Angela Merkel's centre-right coalition, notably the Christian Social Union (CSU) based in Bavaria, are opposed to the eurozone bailouts.
Market anxiety about Spain and Italy has kept their borrowing costs high. Yields on their sovereign bonds have risen to the 6-7% range considered unsustainable.
The ESM was supposed to start operating this month, but there have been ratification delays in several countries.






