The Spanish Prime Minister Mariano Rajoy said that he will take additional steps in the coming days to reduce the country's debt mountain.
Speaking at a conference outside Madrid on Saturday, he said that Spain's 17 autonomous regions must also accelerate their efforts to cut spending. Mr Rajoy is expected to unveil additional budget measures to Spain's parliament on Wednesday.
They are likely to include a rise in VAT, as well as benefit cuts for public sector workers. He urged the eurozone to rapidly implement a rescue plan for Spain's troubled banks and measures agreed at the leaders summit at the end of June to ensure credibility among policymakers.
Eurozone leaders agreed that the region's banks should be able to directly access rescue funds. Previously emergency funding must first pass to the government, who would then divert the money to its banks.
That way, governments would be forced to take on additional debt which risked a rise in borrowing costs.
On Friday Spanish and Italian borrowing costs soared back into the danger zone as traders bet that the policy action by central banks was inadequate defence against the continued political and financial chaos in the eurozone.
The yield on Spain’s benchmark 10-year bond rose above the 7pc bail-out level amid fears that opposition in Germany and Finland could crush the rescue plans agreed in Brussels last week.
The Finnish finance minister, Jutta Urpilainen, said her country was not prepared to keep the euro “at any cost.”
She said the euro was “useful for Finland”, one of the eurozone’s last remaining AAA-rated countries, but added: “Collective responsibility for other countries’ debt, economics and risks; this is not what we should be prepared for.
We are constructive and want to solve the crisis, but not on any terms.” European stockmarkets fell sharply, the euro dropped to its lowest level for three and a half years against the pound, and the yield on Italian 10-year bonds rose to 6.25pc, despite the move by the European Central Bank, the Bank of England, and the Bank of China to pump liquidity into their economies.
On Friday a frustrated Joerg Asmussen, an ECB board member, said too much was being expected of the Bank.
“We must explain what the limits of our powers and mandate are,” he said in a speech. “The ECB cannot compensate for what others - notably political authorities - fail to do.”
He added: “There is no substitute for good policies.” In Brussels there were promises of more solutions at the Eurogroup meeting on Monday. One official told reporters that the 17 finance ministers intended to reach a “political decision” on how to support Spain.
telegraph.co.uk
Speaking at a conference outside Madrid on Saturday, he said that Spain's 17 autonomous regions must also accelerate their efforts to cut spending. Mr Rajoy is expected to unveil additional budget measures to Spain's parliament on Wednesday.
They are likely to include a rise in VAT, as well as benefit cuts for public sector workers. He urged the eurozone to rapidly implement a rescue plan for Spain's troubled banks and measures agreed at the leaders summit at the end of June to ensure credibility among policymakers.
Eurozone leaders agreed that the region's banks should be able to directly access rescue funds. Previously emergency funding must first pass to the government, who would then divert the money to its banks.
That way, governments would be forced to take on additional debt which risked a rise in borrowing costs.
On Friday Spanish and Italian borrowing costs soared back into the danger zone as traders bet that the policy action by central banks was inadequate defence against the continued political and financial chaos in the eurozone.
The yield on Spain’s benchmark 10-year bond rose above the 7pc bail-out level amid fears that opposition in Germany and Finland could crush the rescue plans agreed in Brussels last week.
The Finnish finance minister, Jutta Urpilainen, said her country was not prepared to keep the euro “at any cost.”
She said the euro was “useful for Finland”, one of the eurozone’s last remaining AAA-rated countries, but added: “Collective responsibility for other countries’ debt, economics and risks; this is not what we should be prepared for.
We are constructive and want to solve the crisis, but not on any terms.” European stockmarkets fell sharply, the euro dropped to its lowest level for three and a half years against the pound, and the yield on Italian 10-year bonds rose to 6.25pc, despite the move by the European Central Bank, the Bank of England, and the Bank of China to pump liquidity into their economies.
On Friday a frustrated Joerg Asmussen, an ECB board member, said too much was being expected of the Bank.
“We must explain what the limits of our powers and mandate are,” he said in a speech. “The ECB cannot compensate for what others - notably political authorities - fail to do.”
He added: “There is no substitute for good policies.” In Brussels there were promises of more solutions at the Eurogroup meeting on Monday. One official told reporters that the 17 finance ministers intended to reach a “political decision” on how to support Spain.
telegraph.co.uk
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