(27 Jul 2012) Spain will not be seeking a full-blown financial bailout even as it struggles to emerge from its second recession in three years, the Spanish Deputy Prime Minister said on Friday.
"No rescue is going to be sought, The idea of a rescue is discarded," Soraya Saenz de Santamaria told a news conference.
Spain is trying to convince investors it can manage its finances as the unemployment rate rose to 24.63 percent.
The number of people out of work in Spain shows no sign of dropping, with almost one in four people unemployed and half of those under the age of 25 jobless, the National Statistics Institute said on Friday.
The country is under severe pressure to apply austerity measures and structural reforms to bring down its swollen deficit from 8.9 percent of its 1.07 trillion (t) euros (1.31 trillion (t) US dollars) gross domestic product to below 3 percent by the end of 2014.
Saenz de Santamaria said the government had to meet its public deficit targets or it risked not getting out of the crisis and not creating employment.
"By decreasing the interest rate on our debt we will be able to invest again in the social services that we need," she added.
The minister also commented on the European Central Bank's (ECB) pledge to do all it can to save the euro, saying the institution retained its independence.
"No European government can tell the European Central Bank what it can, has to, or must do," Saenz de Santamaria said.
All together we should hasten, as soon as possible the adoption of measures to end what is badly damaging so many European countries - the uncertainty over our currency."
ECB head Mario Draghi on Thursday suggested the ECB could intervene in markets to lower the borrowing rates of financially weak countries like Spain.
The ECB has bought bonds to fight the crisis over the past two years, but has kept the programme on hold for months.
The bond purchases weren't popular in Germany, which feared the ECB was taking on excessive risk and argued that governments should bear the responsibility of restoring confidence in their economies by reducing public debt and reforming their labour markets.
Last month, the eurozone agreed to lend Spain up to 100 billion (b) euros (123 billion (b) US dollars) to help strengthen banks laden with soured investments following a property sector collapse in 2008.
Also, many of Spain's 17 regions are so heavily in debt due to the recession and the real estate crisis that they cannot raise money on their own on financial markets.
Already two regional governments have said they will tap an 18 billion (b) euros federal emergency credit line.
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