Prime Minister Mariano Rajoy said Spain’s future is on the line in its battle to tame surging bond yields, as the head of the nation’s second-largest region proposed handing back powers to the government to cut costs.
Madrid’s suspended its plan to build an airport for business jets and general aviation south of the city in El Alamo, a victim of budget cuts and demand forecasts, Cinco Dias reported, citing unidentified people.
Prime Minister Mariano Rajoy’s credibility is being undermined by the role of his People’s Party in the failure of the Bankia group, Spain’s third-biggest lender, and the emergence of more unpaid government bills.
Spain’s efforts to calm investors with an additional 10 billion euros ($13 billion) of budget cuts in education and health failed to stem concerns the nation may be the fourth euro member to need a bailout.
Mariano Rajoy, who has become Spain’s prime minister after an eight-year wait, will have to act quickly as borrowing costs approach euro-era records and the country risks becoming the next victim of the region’s debt crisis.