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Spain committed to reforms, all must sacrifice -Rajoy

By Steven C. Johnson & Rodrigo Campos

On September 26, AS/COA held a public presentation with Prime Minister of Spain Mariano Rajoy who expressed his commitment towards embracing reforms essential for both Spain and the euro zone. 

"We know what we have to do, and since we know it, we're doing it," Rajoy said in a speech in New York as violent protests engulfed Madrid for a second day in a new round of anti-austerity demonstrations.

"We also know this entails a lot of sacrifices distributed ... evenly throughout the Spanish society," Rajoy said in an address to the Americas Society in New York.

The violent protests in Madrid and growing secession talk in the wealthy Catalonia region have increased the pressure on the government to seek external aid to help get public finances in order.

Rajoy has been reluctant to ask for help, but in an interview with The Wall Street Journal this week he said he would seek a bailout if Spanish debt financing costs remained too high for too long.

The yield on Spain's 10-year benchmark bond, a gauge of investors' perceived risk for lending money to the government, topped 6 percent on Wednesday. Earlier this year, the yield rose above 7 percent, the highest since the euro was created more than a decade ago.

The European Central Bank said this month it would ease borrowing costs for indebted states such as Spain by purchasing their government bonds. But a country must request aid from the European rescue fund and meet strict conditions to qualify for ECB help.

Rajoy said reducing the budget deficit and embracing reforms to make the country more competitive were essential for both Spain and the 17-country euro zone, which has been mired in a debt crisis for more than two years....

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