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Rajoy calls for EU intervention to stop "bleeding" of debt crisis

PM-elect pledges to quickly pass budget deficit-cap law

Prime Minister-elect Mariano Rajoy told his fellow conservative leaders of Europe that the European Union must introduce "without further delay" all the measures and resources it has at its disposal "to stop the hemorrhaging" of the continent's sovereign debt crisis.

Speaking at a convention of the European People's Party (EPP) in Marseille, France, Rajoy didn't specifically mention by name the European Central Bank (ECB) but suggested that it should intervene ? a move that German Chancellor Angela Merkel has opposed up until now.

"I am aware that these [ECB] interventions require settings that offer security and greater discipline to avoid any irresponsibility when it comes to drafting budgets," he said. "Well, let's do it! Spain supports this measure. We need strict budget controls and need to introduce additional measures to ensure that a crisis like the one we are going through doesn't repeat itself."

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Speaking about his own plans, Rajoy promised quick action to shore up Spain's critical debt problem, explaining that he will soon embark on getting a law passed that guarantees stability in future budgets along the lines of the recent Constitutional reform passed by Congress that calls for caps on deficits.

Broad financial reform

Under an agreement reached earlier this year by the PP and the Socialists, a new law will have to be passed before June 30 to ensure that the central government's structural deficit cannot surpass 0.26 percent of the country's GDP and the regional governments cannot pass a 0.14-percent benchmark of their GDPs.

Rajoy also pledged to make Spain's job market more flexible with "profound legislative reform," and to "finish the restructuring of the Spanish financial system" to help free up credit and loans for companies and working- class citizens. He also said that Spain needs to strengthen its "controls and supervision of the financial institutions."

Although his pledges were aimed at building confidence among his fellow European party members, Rajoy offered no precise details of what his proposed reforms will contain.

The European Commission president, José Manuel Durao Barroso, a fellow conservative who met with Rajoy earlier in the day, said that the PP leader won the November 20 elections by a landslide "because he told Spaniards the truth."

"We need to have the courage to say the things that most people really don't want to hear," said Barroso, a former Portuguese prime minister who served from 2002-2004.

Rajoy also met with Polish Prime Minister Donald Tusk, the current EU president.

Mariano Rajoy sits behind German Chancellor Angela Merkel and French President Nicolas Sarkozy at the EPP meeting.
Mariano Rajoy sits behind German Chancellor Angela Merkel and French President Nicolas Sarkozy at the EPP meeting.DIEGO CRESPO (EFE)
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