Spanish banks 'will not need international bailout'

29 May 2012

Spain's banking system will not require an international bailout despite the fact the country's economic problems are showing no signs of abating in the near future.

Prime minister Mariano Rajoy has pledged that the nation's financial sector is strong enough to resist the need for assistance from fellow eurozone states, even though there are clear signs the economy is struggling.

For instance, the yield on ten-year Spanish government bonds edged towards the danger level of seven per cent yesterday - a fact that intensified speculation among analysts that the country will need external help sooner rather than later.

Meanwhile, data from the Institute of National Statistics released this morning showed that retail sales declined by 9.8 per cent last month - their fastest rate since such records began in 2003.

Nevertheless, Mr Rajoy has insisted "there will not be any European rescue for the Spanish banking system", which has been hugely impacted by the nation's failing property sector.

By Claire Archer

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