Spain sends bailout signal

Spain's Prime Minister Mariano Rajoy has given the clearest signal yet that his country is ready to call on the aid of the European Central Bank to buy his nation’s bonds.

Rajoy told the Wall Street Journal that if the price of Spanish government debt remained too high for too long, then “I can assure you 100% that I would ask for this bailout”.

The Spanish PM had seemed lukewarm about calling on the ECB, which has pledged to be a “backstop” for short-term government debt provided strict conditions are met.

Earlier this month Rajoy went on Spanish TV to say that he would not accept being told by the ECB “which were the concrete policies where we had to cut”. Today, while Rajoy was keen to stress that he would need to be sure that the strings attached by the ECB would be “reasonable”, the change in emphasis was clear.

Most market analysts believe that at some point Spain will need an ECB bailout, with 10-year government debt currently trading around the highly symbolic 6% mark.

Rajoy’s latest comments came as stock markets dropped across Europe, while the Bank of Spain said the country’s GDP had “kept falling at a significant rate” over the third-quarter of the year.

After protests in Madrid last night resulted in 38 arrests, Greece today faced a national strike to protest against austerity, the first such stoppage since the coalition government of Antonis Samaras came to power in June.