(MADRID) - Europe's competition chief said on Wednesday that a huge eurozone rescue loan for Spain's banks will have a cost, warning Madrid: "Nothing is free".

Spain insists that a eurozone loan of up to 100 billion euros ($125 billion) imposes conditions only on the banks, with no new steps required on austerity or broader economic reforms.

But European Commission vice president and competition chief Joaquin Almunia said the detailed conditions to be imposed on the financial sector for the loan had yet to be determined.

Those conditions should be drawn up within the "general framework" used by Europe since the start of the eurozone crisis, Almunia said in an interview with ABC Punto radio.

"You have to impose conditions," the senior European Union official said.

"Anyone who receives money to support their needs has to give something in return," he added.

"Nothing is free. But at the same time, you have to explain without demagoguery, without populism, without fear but with a vision for the future, that if we don't have a solid, solvent financial system capable of financing economic activity and the needs of a country and its economy, nothing will work."

Announcing the deal Saturday, finance ministers of the 17-nation eurozone said Spain's commitments on reforms and slashing the public deficit would be closely and regularly reviewed in parallel with the loan.

But besides ensuring implementation of those promises, they agreed that the banking rescue loan's conditions "should be focused on specific reforms targeting the financial sector".

Almunia dismissed a question about whether Spain's banking crisis could force it out of the euro and back to the peseta: "That's impossible, no-one is thinking of that, no-one with any common sense."