Spain's PM defends solvency of Spanish banks, downplays upward revision of 2011 budget deficit

MADRID – Spain’s prime minister has defended the solvency of Spanish banks and downplayed his French counterpart’s suggestion that they could benefit from a recapitalization using European funds.

Speaking to journalists on his arrival in Chicago for Sunday’s NATO summit, Mariano Rajoy said comments made by Francois Hollande were not based on accurate figures. Rajoy says “Hollande does not know the state of Spanish banks.”

Spain on Friday revised its 2011 budgest deficit to 8.9 per cent. Rajoy said this shows the government’s willingness to be transparent with public accounts.

Spain’s deficit is higher than the euro zone’s economic threshold of 3 per cent. The previous, Socialist government, has put the 2011 deficit at 6 per cent.