SPANISH Prime Minister Mariano Rajoy’s efforts to tackle the economic crisis has been praised by the German Chancellor.
Angela Merkel described Spain as an ally and acknowledged that the current regime had ‘inherited a difficult situation’.
The support will be welcomed by Spain as it comes under increasing pressure from the EU to reveal details of its planned banking reforms.
European leaders are anxious to discover how Rajoy plans to finance the €19 billion bailout of troubled Bankia and whether other banks are likely to need help.
Spanish Deputy Prime Minister Soraya Saenz de Santamaria has flown to Washington to meet with Christine Lagarde, the head of the International Monetary Fund (IMF).
The talks fuelled growing rumours that Spain is in the process of requesting a bailout, but the IMF denied it was preparing a rescue package.
“There is no such plan,” said Lagarde.
Saenz de Santamaria confirmed the meeting had focused on how to set up a fund to recapitalise European banks.
“The problem is not Spain as a country,” she said.
“But our financial system in a given moment has needs just like the other states had at other times.”
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