The Qatari government has pledged to invest 300 million euros (414 million dollars) to recapitalize Spanish savings banks, Spanish media reported Monday, DPA reported.
The savings banks, known as cajas, are seen as the weak link of the country's banking sector. They could play a key role in determining market trust and whether Spain will need an international bailout.
Prime Minister Jose Luis Rodriguez Zapatero obtained the pledge during a visit to Doha on Monday.
He described it as "good news" which signalled Qatari "confidence" in the Spanish economy, at a joint press conference with his counterpart Sheikh Hamad bin Jassim al-Thani.
It would be decided within 10 days which Spanish savings banks Qatar would invest in, the daily El Mundo website quoted al-Thani as saying.
The Gulf country also promised even bigger investments in Spanish telecommunications and energy companies, according to the daily.
Madrid and Doha are planning to set up a joint fund for investments in Spain and Latin America, the daily El Pais reported on its website.
The new agreements were due to be sealed during Qatari Emir Hamad bin Khalifa al-Thani's visit to Spain in April.
Madrid's economic relations with Doha were hitherto largely limited to the energy sector, with the emirate supplying about 14 per cent of Spain's gas needs.
Savings banks hold more than 40 per cent of bank assets in Spain, including billions of euros in bad loans after lending heavily to the housing sector before it collapsed in 2008.
The Spanish government has estimated the cajas' liquidity needs at about 20 billion euros, but many analysts believe they could need considerably more.
The government is carrying out a sweeping reform of the sector, including liquidity injections from a bank restructuring fund.
In addition to announcing economic agreements, Zapatero and al-Thani criticized Libyan leader Moamer Gaddafi.
Zapatero said the international community would "not tolerate" the violent reprisals in the North African country, while al-Thani said it was "not yet too late" for Gaddafi to put an end to the bloodshed.
Zapatero's tour of Arab countries was to take him from Qatar to the United Arab Emirates, before a visit on Wednesday to Tunisia, an appointment which was to be kept despite the unrest in the North African country.
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