Spanish PM urges calm over crisis

Spanish Prime Minister Mariano Rajoy played down fears the country would need an international bailout, saying the country would find its own way out of the financial crisis.

Spanish Prime Minister Mariano Rajoy tried to play down fears the country would need an international bailout, saying the country would eventually find its way out of the financial crisis on its own.

After a dismal week that saw the country's borrowing costs soar, Rajoy, speaking at an economic forum in Sitges in eastern Spain, Rajoy said he was sending a "message of calm".

"Spain is a very solid country, although right now, no one seems to remember this," he said.

Doubts about Spain's solvency rocked global markets this week and saw the interest rate on 10-year government bonds hit a record 5.48 percentage points on Friday, as Spanish markets slumped to lows not seen since April 2003.

But Rajoy insisted the country "will get through the storm through its own efforts and with the support of our European partners.

"Because what's at stake isn't just the economic future of Spain but the very future of European monetary union."

Rajoy's message echoes similar messages from the Spanish budget minister and other officials told reporters on Friday that the government was confident of the country's solvency.

In an interview with German magazine Der Spiegel due out Monday, German Chancellor Angela Merkel has said she doubts Spain has the resources to cope with its crisis. She has suggested the country should make use of European rescue funds.

Spain is Europe's fourth-largest economy and has been battered by a crash in the property market and record unemployment of about 25 percent.

Plunging housing values saw private and banking assets drop and eradicated a source of plentiful income for the Spanish regions.

Spanish bank Bankia has asked the state for 19 billion euros ($24 billion) to repair its books, in addition to 4.5 billion euros already injected, the biggest rescue in Spanish banking history.

But Rajoy said "I have no doubts about the vast majority of financial institutions in Spain".