A joint mission, including EC, ECB, EBA, EFSF, and IMF visited Madrid from 27 June to 4 July 2012 following a request by the Spanish government for external financial assistance under the terms of the Financial Assistance for the Recapitalisation of Financial Institutions by the European Financial Stability Facility (EFSF). On 4 July the mission concluded a staff level agreement for a financing package of up to EUR 100 billion for recapitalisation and restructuring of the Spanish financial sector. The Memorandum of Understanding (MoU) was signed on 23 July. This report by European Commission staff provides an overview of the challenges faced by Spain and its financial sector, discussions with the authorities, and the objectives and design of the financial sector adjustment programme.