Spain: Fiscal integration can save euro

Madrid - Spain's Prime Minister Mariano Rajoy went on the offensive in parliament Wednesday, calling for greater European fiscal and banking integration to save his country and the wider 17-country eurozone. Madrid's key borrowing rate closed at a euro-era high, indicating deep investor concern over the government's financial stability.

Rajoy lambasted the Socialist opposition for not addressing the country's banking debt crisis when it was in power from 2004 until November, and called for their support in "a project for European fiscal and banking integration."

Madrid's stock index finished the day up 1.4 percent.

Rajoy told Spain's gathered lawmakers that he had sent a letter to Jose Manuel Barroso, president of the EU Commission, and Herman Van Rompuy, president of the European Council, calling for new measures that might help weaker states like Spain. Those could include sharing debt burdens across countries or guaranteeing bank deposits across the eurozone.

He said he would be present at a meeting of European leaders in Rome on June 22 "where I will back fiscal and banking integration."

Rajoy's sentiments were mirrored in the European Parliament in Strasbourg, France, where Barroso said the euro block needed a plan for the long term, including coordinated budgets and banking regulation.

Spain last weekend asked for a loan lifeline of up to € 100 billion ($125 billion) from the 17 countries that use the euro to shore up Spanish banks. Because Spain's borrowing rates in financial markets are high, the country can't afford to raise the rescue money itself.