Spanish PM asks for EU support as risk premium passes 500 points

Madrid, May 16 (Xinhua-ANI): Spanish Prime Minister Mariano Rajoy on Wednesday called on the European Union (EU) to speak out in defense of the euro.

Addressing the Spanish congress shortly after it was announced the Spanish risk premium passed the 500 point mark on Wednesday morning, Rajoy asked for the EU to send a "clear and firm" message in defense of the euro and the ability of the countries in the eurozone to sustain their public debt.

The Spanish prime minister admitted his country's situation was "very complicated" and that it was hard for Spain to raise funds at a reasonable price, but insisted his government's policy of fiscal restraint was the correct one. He added he would take further measures if and when needed.

The 500 point mark was passed 10 minutes after the market began trading, climbing from Tuesday's closing level of 487.68 to a high of 507 points before dropping to 502 points by 9am.

Meanwhile, interest rate offered on Spain's 10-year bonds rose to 6.5 percent, a level considered unsustainable in the medium to long term.

Analysts said fears over the future of Greece in the euro have raised doubts over Spain's ability to reduce its level of public debt.

Spain's public deficit stood at over 8 percent of GDP last year. Rajoy has promised to reduce that level to 5.3 percent by the end of this year. However, the European Commission forecasts Spain will end the year with public debt of 6.4 percent of GDP.

Earlier this month, risk assessment agency Standard and Poor's lowered the ratings of most of Spain's autonomous communities. Spain's national economy is expected to shrink by 1.8 percent this year. (Xihua-ANI)