Salgado says Spain is on target

MADRID, Aug. 9 (UPI) -- Spanish Finance Minister Elena Salgado said Spain would hit its financial goals this year without an international bailout.

"Spain's fundamentals show we are very far from requiring a bailout," Salgado said during a radio interview, The New York Times reported Tuesday.

With help from the European Central Bank, yields on government bonds in Spain and Italy fell Tuesday seven days after Spanish bond yields hit a record high on Aug. 2 at 6.458 percent.

Yields in Spain fell to 5.019 percent, while yields on 10-year bonds in Italy reached 5.143 percent.

The senior foreign-exchange strategist at Rabobank International in London, Jane Foley, said the ECB interventions "may have had clear benefits in treating the symptoms of the crisis (but) is not a cure."

Spain, meanwhile, has set a goal of lowering the budget deficit from 9.2 percent of the gross domestic product to 6 percent of the GDP for 2011, the Times said.

To do so, the federal government has to focus on regional governments that have hard-to-control budgets. "The risk of fiscal slippage in the regions are likely to persist," said Antonio Garcia Pascual, an analyst at Barclays Capital.