The eurozone is not equipped to bail out Spain, the country's prime minister Mariano Rajoy has admitted, as global traders continued to punish the nation's stocks and bonds.
Mr Rajoy said it was "not possible to rescue Spain" but insisted his country did not need a Greek-style international bail-out anyway.
"To talk about a bail-out for Spain at the moment makes no sense," he told reporters. "Spain is not going to be rescued; it's not possible to rescue Spain, there's no intention to, it's not necessary and therefore it's not going to be rescued."
Despite his comments, the Madrid bourse fell and the yields on the country's benchmark bonds remained stubbornly high. While other European markets soared on Thursday following strong gains in America, Spain's Ibex index lost 0.5pc.
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