OTTAWA - News of a financial bailout for Spain is music to federal Finance Minister Jim Flaherty's ears.

"We are encouraged to see Europe take this step to tackle the ongoing challenges," Flaherty said in an e-mail to QMI Agency.

For weeks, Spain insisted it did not need help to recapitalize banks crippled by bad debts, but on Saturday, Spanish Prime Minister Mariano Rajoy finally accepted a Eurozone bailout plan that would see Madrid borrow up to 100 billion euros ($128.5 billion CDN) for its bank rescue fund.

The move is meant to reassure investors and shore up banks in case Greece's election next Sunday results in a radical left government that would reject a European reform plan, leading to the country's exit from the Euro currency and a run on weakened banks.

Flaherty calls Spain's rescue a step in the right direction.

"We look forward to timely implementation of this action and further consideration by Europe of what needs to be done to resolve the ongoing challenges and achieve long-term sustainability," he said.

The European crisis will be a major topic at the G20 talks later this month in Mexico.

It's expected Canada will resist pressure at the talks to pour money into the International Monetary Fund as part of a global bailout effort.

-- with files from Reuters