Spanish Prime Minister Mariano Rajoy said Tuesday that the European Union should move toward fiscal and banking integration, with Eurobonds and with a supervisor overseeing activity in the sector.
Rajoy also said that the EU should make clear that the euro is an irreversible undertaking, that ditching the euro is not being considered and it should support member countries that are going through financial difficulties.
The prime minister said that Europe has a deposit guarantee fund and says clearly where it is going to provide security during an appearance before the Senate, the upper house of Spain's Parliament.
Rajoy spoke during a session at which the Spanish Socialist Workers Party, or PSOE, the main opposition party, asked him for an evaluation of the economic situation as it has evolved since last Nov. 20, when the center-right Popular Party, or PP, won the general elections.
Rajoy defended himself against the criticism of Socialist Sen. Marcelino Iglesias,who said that when the PP won the elections the Spanish economic situation was not good, but now it finds itself in a situation of "permanent emergency."
The prime minister recalled that in the state's outlook for 2012 it is predicted that the economy will decline by 1.7 percent and that already-high unemployment will grow, and that is the reason why it had been announced that it will be a bad year for the economy.
This is also a difficult period because the deficit is "unsustainable" and because the necessary reforms have not been made, but the situation can change because the PP has done so before, Rajoy said.
Shortly before he made his remarks to the Senate, in a meeting with senators from his party Rajoy encouraged them to "be calm" about the adjustments and reforms implemented bearing fruit, and he said he was convinced that the country will get out of this crisis.
At the same meeting, he reiterated the five key points of his government's approach to the economy: austerity to reduce the public deficit, structural reforms, defending reforms at home and in the EU, supporting the euro and supporting greater European fiscal integration.
He also said that the country's main problem is the very high foreign debt, both public and private, which stands at around 989 billion euros ($1.23 trillion) and represents 92 percent of the gross domestic product.
Last week, Spain suffered a severe downturn in the markets that raised the country-risk premium to record levels, something that makes it more expensive to get the country out of the crisis.
This week, the pressure has lightened up a bit and on Tuesday the risk premium - the extra return investors demand on Spanish government bonds compared to safe-haven German debt - has fallen to 509 basis points. EFE