Spain PM says Europe cannot accept wide risk premia

MADRID (Reuters) - Spanish Prime Minister Mariano Rajoy said on Friday the euro zone cannot accept the wide gaps between the sovereign bond yields of its heavily indebted members and those of the better funded nations.

Rajoy, who is battling to regain the confidence of financial markets that have pushed Spanish bond yields to their highest since the launch of the euro, said the European Central Bank's decision on Thursday to use non-conventional measures to salvage the currency, marked a shift in policy by the central bank.

"The euro zone cannot accept, if we are truly talking about a project, a joint project for millions of citizens, that there should be such wide differences in financing between one member state and another," he said.

The premium investors command to hold Spanish over German debt rose to nearly 570 basis points on Friday, after having touched a euro-era high of around 640 basis points last week.

Rajoy, whose conservative government has imposed tough austerity measures on a country already in recession to meet strict targets on its debt and deficit, added his government had no intention of cutting pensions next year.

(Reporting by Nigel Davies; Writing by Amanda Cooper; Editing by Paul Day)