Spain's PM wants assurance rescue would cut debt costs

MADRID Tue Nov 6, 2012 5:10am EST

Spain's Prime Minister Mariano Rajoy delivers a speech on the results of the last European Council at the Spanish parliament in Madrid October 31, 2012. REUTERS/Andrea Comas

Spain's Prime Minister Mariano Rajoy delivers a speech on the results of the last European Council at the Spanish parliament in Madrid October 31, 2012.

Credit: Reuters/Andrea Comas

MADRID (Reuters) - Spain's Prime Minister Mariano Rajoy said in a radio interview on Tuesday one of the main doubts hanging over the potential request for aid is whether European Central Bank plans to buy the country's bonds would bring its debt costs down.

He said that a more reasonable level for Spain's key spread between the yield on its ten-year bond compared with German benchmark bunds would be around 200 basis points. On Tuesday it stood around 435 basis points.

Conditions over a potential bailout were still being studied, he said, adding that a lack of financing was the Spanish economy's biggest problem.

(Reporting by Tracy Rucinski; writing by Nigel Davies; editing by Paul Day)