Over the past month, some senior members of the Spanish government have increasingly begun to view a rescue request positively, providing it would not come with significant new conditions attached, but Mr Rajoy in public has continued to argue that no decision needs to be taken quickly.
Spain’s borrowing costs compared with Germany’s have fallen from euro-era highs since the European Central Bank outlined a mechanism through which it could return to buying up Madrid’s debt. But this debt has begun to inch higher in recent weeks, as investors worry that Mr Rajoy will opt to delay a decision for as long as possible.
The prime minister also struck an optimistic note by predicting that Spain’s economy would return to growth by 2014, and that next year would see an improvement from 2012. This would open the way for reducing taxes, he said. Spain’s deteriorating economy had forced Mr Rajoy to raise taxes after less than six months in office, having pledged to reduce them while he was in opposition.
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