Spain to reject bailouts dictating economic policies: Premier

Spanish Prime minister Mariano Rajoy says he will reject any international economic bailout that dictates unreasonable conditions over spending cuts and pensions in the crisis-stricken country.

“I could not accept that they tell us which are the concrete policies in which we have to cut or not cut,” Rajoy said on Monday.

The 57-year-old leader stressed that his government has not decided to ask for another economic bailout from the European Union, saying that the EU partners should set reasonable conditions for any potential financial aid.

Despite the country’s rising economic woes, Rajoy said that old-age pensions would not be affected by the government’s future decision. “If there is one area I won’t touch, it is pensions because the pensioner is the most fragile person,” he said.

The premier also said that his government would not increase value-added taxes any more. The Spanish government had increased the value-added taxes from 18 percent to 21 percent in a bid to slash the public deficit.

Rajoy’s remarks came only days after the European Central Bank announced it would buy Spain’s bonds in an effort to reduce the country’s borrowing costs, but that the Spanish government should impose strict conditions in return.

The announcement alone cut Spain’s borrowing costs on financial markets.

“We are studying the situation. We are going to see if it suits us or not, if it is necessary or not, but I will always do what is in the public interest,” Rajoy said, amid concerns that Spain would delay or avoid the economic rescue.

Spain’s economy, Europe’s fourth-largest, is now the epicenter of the eurozone debt crisis and is struggling with a deepening recession and an unemployment rate of about 25 percent.