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Spain "will not have to ask for economic help"

Fri 30th Apr 2010

Spain's debt is under control and it will not have to ask for help like fellow euro zone member Greece, Economy Minister Elena Salgado said in an interview with newspaper Cinco Dias published on Friday.

"Our debt is clean, we will not have to ask for help," she said.

The country is sticking to its targets to reduce the deficit to 3% by 2013, she said, and next year's budget should be tighter than this year's.

Wide-ranging cuts to government administration would be announced on Friday, she added.

The Spanish public deficit was one of the highest in the euro area at 11.4% of gross domestic product (GDP) in 2009.

Officials from the International Monetary Fund, European Union and European Central Bank are in Athens to negotiate a Greek bailout and hope to wrap up a deal within days to avoid a debt default that could threaten other weak EU countries such as Portugal and Spain.

Credit rating agency Standard & Poor's cut its ratings on Spain by one notch to AA from AA-plus on Wednesday, saying a longer-than-expected period of low growth could undermine efforts to cut the budget deficit.

A day earlier, S&P had cut Greece's credit rating to junk bond status and slashed its ratings on Portugal.

Salgado said she did not think the downgrade of Spain was justified and that the agency was using much more pessimistic forecasts than other analysts.

"Frankly, I think the concrete facts do not support this decision," she said.

She said decisions to aid countries in the euro zone which come under speculative market attacks should be made more quickly, and urged that the aid package for Greece be released as soon as possible.

"The quicker it's cleared the better because it's generating instability that is affecting us as well," she said.

Salgado also said she believed Spanish unemployment had peaked at 20 percent. Official data will be published on May 4.

Spain's unemployment rate is the highest in the euro zone, and has been a major factor preventing the country from rebounding from its worst recession in decades.

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