Spain's banks do not need bailout, says minister

Spain's banks do not need to be bolstered with European money as suggested by France, the country's economy minister said today.

Luis de Guindos spoke as markets dipped on last week's news that Spain's 2011 budget deficit was higher than expected - an embarrassing second correction to the figure.

Bond fell, pushing the yield on 10-year bonds up by 0.06 percentage points to 6.26%. The Ibex-35 stock index was down 0.5%.

Mr de Guindos said the increase in the 2011 deficit figure from 8.5% of GDP to 8.9% was due to overspending by four regions, which had not been "totally transparent" in providing figures initially.

He said recently nationalised lender Bankia will need an injection of around 7 billion euros (£5.7 billion), but rejected the need for European rescue funds.

AP