This article is from the source 'bbc' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.bbc.co.uk/news/business-19109247#sa-ns_mchannel=rss&ns_source=PublicRSS20-sa

The article has changed 6 times. There is an RSS feed of changes available.

Version 2 Version 3
Spanish cabinet discusses budget Rajoy considers bailout options as Spain's borrowing costs fall
(about 2 hours later)
Spain's implied cost of borrowing remained above 7% on Friday as Prime Minister Mariano Rajoy discussed budget plans with his cabinet. Spain's implied cost of borrowing fell below 7% on Friday as Prime Minister Mariano Rajoy said he was considering bailout options.
The government is also due to submit budget plans for 2013 and 2014 to the European Commission later on Friday. At a press conference in Madrid, Mr Rajoy said he would do "what was best for the Spanish people".
Last month, Madrid announced additional spending cuts and tax rises worth 65bn euros ($79bn; £51bn). The yield on Spain's 10-year bonds dropped to 6.8% late on Friday after topping 7.3% earlier in the day.
There are fears that Spain's shrinking output and indebted banks could force it seek a financial rescue. Greece, Portugal and Ireland all had to seek international bailouts when their borrowing costs stayed above 7%.
High borrowing costs In June, Spain requested 100bn euros ($122bn) of loans from the EFSF bailout fund to help support its banks, which are struggling with bad debts from loans made in the property sector.
The yield on Spain's 10-year bonds was trading at 7.1% early on Friday. However, speculation had increased in recent weeks that the government would have to request a full financial rescue.
If Spain's borrowing costs remain at this level for long periods of time it would make it unaffordable for the government to service its debts.
Greece, Portugal and Ireland all had to seek international bailouts when their borrowing costs hit similar levels.
Effectively, they had to ask the European Union and International Monetary Fund to lend them the money to pay their bills.
In June, Spain requested 100bn euros of loans from the EFSF bailout fund to help support its banks, which are struggling with bad debts from loans made in the property sector.
However, on Thursday Mr Rajoy said he had not discussed making a request for a full financial bailout with Mario Monti during a visit by his Italian counterpart.
But during a joint press conference, Mr Rajoy would not say whether he thought Spain would need to seek a full financial rescue.
Mr Rajoy's cabinet discussed fresh spending cuts for next year and 2014.
These will be outlined in a plan due to be submitted to the European Commission later on Friday.
Draghi's challengeDraghi's challenge
On Thursday, the president of the European Central Bank (ECB) Mario Draghi said the ECB was ready to intervene in the bond markets to bring down the cost of borrowing for countries such as Spain.On Thursday, the president of the European Central Bank (ECB) Mario Draghi said the ECB was ready to intervene in the bond markets to bring down the cost of borrowing for countries such as Spain.
But he told reporters that Spain's formal request for help from the European bailout funds - the EFSF and ESM- was "a necessary condition" of any ECB support.But he told reporters that Spain's formal request for help from the European bailout funds - the EFSF and ESM- was "a necessary condition" of any ECB support.
Eurozone members Germany and Finland oppose ECB support for Spain and Italy without promises from their governments to stick to strict spending and budget plans. Eurozone members Germany and Finland oppose ECB support for Spain without promises from its government to stick to strict spending and budget plans.
By making a formal request to the EFSF, Spain would have to sign a memorandum of understanding or legal promise to stick to agreed plans.By making a formal request to the EFSF, Spain would have to sign a memorandum of understanding or legal promise to stick to agreed plans.
"What I want to know is what these measures are, what they mean and whether they are appropriate and, in light of the circumstances, we will make a decision, but I have still not taken any decision," he said.
The government was also due to submit budget plans for 2013 and 2014 to the European Commission on Friday.
Last month, Madrid announced additional spending cuts and tax rises worth 65bn euros ($79bn; £51bn).