Spanish Prime Minister Mairano Rajoy had spoken with US President Barack Obama yesterday in a telephone call regarding the Euro Zone crisis and the financial markets, their offices said.

Obama called Rajoy for a half-an-hour chat in which they “addressed the economic situation in Spain, in the European Union, and in the world,” according to a statement issued by the Spanish premier’s office.

They also discussed the situation on the financial markets, where nervous investors have driven up Spain’s borrowing costs to unsustainable levels over the long-term, complicating the country’s ability to finance its debt.

“Prime Minister Rajoy stressed the efforts the government and Spaniards have undertaken to reduce the public deficit and come up with an ambitious programme of structural reforms,” the statement added.

White House spokesman Jay Carney also announced the phone call, saying Obama wanted to “discuss economic conditions in the Euro Zone’’.

The Spanish Government had said on Friday it planned savings of €102 billion ($125 billion) by 2014 as it stepped up efforts to balance the strained public finances and bring them back in line with EU norms.

In June, it secured a €100-billion credit line from the EU for its stricken banking sector but investors fear that with its borrowing costs rising, the country may in the end need a bailout.

Madrid stocks leapt by 4.41 per cent on Monday amid rumours of the possible bailout and intervention by European rescue funds on the bond market.

(This article was published on August 7, 2012)
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