Spain insists no foreign rescue needed

Conservative Spanish prime minister Mariano Rajoy insisted yesterday that the country’s banking sector would not need an international rescue, as concern over the bailout of nationalised lender Bankia sent its stock price plummeting while Spain’s borrowing costs soared.

“There will be no rescue of the Spanish banking sector,” said Mr Rajoy, but he added that the government had no choice but to bail out Bankia, which has been crippled by Spain’s real estate slump.

“We took the bull by the horns, because the alternative was collapse,” said Mr Rajoy, stressing that Bankia clients’ savings were now safer than ever.